High Court Of Madhya Pradesh
Assistant Commissioner Of Income Tax vs. Gendalal Hazarilal & Co.
Sections 260A
Asst. Year 1993-94
Dipak Mishra & A.K. Shrivastava, JJ.
IT Appeal No. 55 of 1999
9th July, 2003
Counsel Appeared : Rohit Arya, for the Appellant : P.M. Choudhary, for the Respondent
JUDGMENT
DIPAK MISRA, J. :
In this appeal preferred under s. 260A of the IT Act, 1961 (for brevity “the Act”), the Revenue has called in question the penetrability of the order passed by the Income-tax Appellate Tribunal (hereinafter referred to as “the Tribunal”), in ITA No. 243/Ind of 1997 dt. 25th Jan., 1999.
2. The facts as have been depicted are that the respondent-assessee’s firm carries on business of liquor contract. For the asst. yr. 1993-94, the assessee was handling Sehore Group, Ashta Group and Doraha Group of shops. It filed the return disclosing income of Rs. 98,245 which was the profit as per the P&L a/c after allowing interest and remuneration to partners. The profit prior to allowing of interest and remuneration was Rs. 3,89,525 which was said to be supported by the certificate issued by the competent authority of the Excise Department. As per P-5 certificate for the three groups, the profit worked out to Rs. 3,89,525. As observed in the assessment order the assessee did not maintain shop-wise accounts and no cash memos were produced and, therefore, the sale price mentioned in P-5 certificate could not be subjected to verification. The expenses mentioned in P-5 certificate could not also be verified in the absence of shop-wise books of account. The AO observed that the certificates were on the basis of the information given by the assessee including sale price which was not fixed by the Exciseauthorities but taken as per details given by the assessee. It was held by the AO that the proper stock records were not maintained and accounting for empty bottles was also not proper. The AO invoked the provisions contained in the proviso to s. 145(1) of the Act and estimated the profits as 2-1/2 times the licencing fee.
3. Being dissatisfied with the order passed by the AO the assessee preferred an appeal before the CIT(A). The appellate authority after discussing the facts in entirety, namely, no books of account were maintained for 40 individual shops where the liquor was actually sold; no cash memos were issued; system of accounting for sales is that when the shop owner of retail outlet comes to head office to take delivery of country liquor; that he brought some cash with him which was entered in the cash book as cash sales; that lot of liquor was issued to him; that the aforesaid cash sales was not verifiable; that it was very doubtful that the liquor was actually sold by retail shop owner at the rates now certified by the Excise authorities as per the certificates dt. 10th Dec., 1996, produced by the assessee; that the expenses claimed by the assessee were also not fully verifiable; and that the rejection of books by the AO was justified. The appellate authority, eventually, came to hold as under : “(a) The licence fees during the year had suddenly shot up to Rs. 2.40 crores as compared to Rs. 1.32 crores of last year and Rs. 91 lakhs of year before last. This shows that this year the contracts were taken under severe competition and hence it had adversely affected the NP rate and sales/licence fees ratio. (b) The CIT(A) in his appellate order for the asst. yr. 1983-84 has deleted the entire trading addition on the ground that licence fees during that year had increased by 38 per cent as compared to the last year which had adversely affected the NP rate. The CIT(A) in this order had relied upon the Tribunal’s order dt. 21st Oct., 1981, in the case of Ramanad & Co. The NP rate upheld by the CIT(A) in the asst. yr. 1983-84 was 3.42 per cent. (c) The learned Tribunal, Indore Bench, vide their order dt. 18th Feb., 1993, in the case of Dilip Kumar Shivhare for the asst. yr. 1988-89 have upheld a NP rate of 3 per cent, as reasonable. (d) The learned Tribunal, Indore Bench, in the case of the appellant for the asst. yr. 1984-85 have upheld a NP rate of 13 per cent shown by the appellant as reasonable. 3.2 Considering the various factors, it is held that it shall be reasonable to estimate sales at two times of licence fees and applying a NP rate of 3 per cent on the said estimated sales. By this method, the net profit of the appellant during the year is worked out at Rs. 14,40,000 (3 per cent of Rs. 4.80 crores). The appellant shall therefore get a relief of Rs. 15,61,246 (30,01,246 14,40,000) during the year.”
4. Being dissatisfied, the assessee preferred an appeal before the Tribunal which in its order in para 2 expressed the view as under : “2. During the course of arguments our attention was invited to the order of the Tribunal for the asst. yrs. 1981-82 to 1984-85 in ITA Nos. 966 and 967/Ind of 1988 in which an identical issue was examined by the Tribunal in an exhaustive manner. The said order of the Tribunal was followed by the Tribunal in the succeeding years, i.e., 1987-88 in ITA No. 1/Ind of 1991. Since the Tribunal has taken a particular view in favour of the assessee in the earlier years, we find no reason to take a different view in the instant case. We, therefore, decide the appeal in favour of the assessee after following our earlier order and direct the AO to accept the book results shown by the assessee.”
5. Ordinarily, we would not have reproduced the order passed by the Tribunal but learned counsel for the parties repeatedly referred to the said paragraph, inasmuch as learned counsel for the Revenue has referred to it to show that it is absolutely cryptic, laconic and not based on reasons and counsel for the assessee-respondent submitted, in justification, that the Tribunal has done nothing erroneous as it has followed its earlier orders. At this juncture we think it appropriate to state that a reply has been filed by the assessee in this appeal contending, inter alia, that it intended to oppose the admission of the appeal as no substantial question of law is involved in the appeal. It is pertinent to state here that the appeal was admitted after framing substantial question of law and notices were directed to be issued. However, the facts which have been brought on record by way of reply, we may profitably refer to the same. It is put forth that the assessee is a partnership firm and for the assessment year in question it had filed its return along with the statement of total income and trading, P&L a/c. The account submitted by the assessee was audited by a chartered accountant as per the requirement of s. 44AB of the Act. It is put forth that a perusal of the P&L a/c would clearly show that the assessee has disclosed sales on the basis of the books of account at Rs. 3,91,25,515. The report of the auditors was duly supported by the audited trading P&L a/c. It is urged that the assessee has maintained proper and regular books of account in respect of its liquor contract business. It is contended that the accounts including the accounts for branches were properly maintained in the head office and the shop-wise details were also available in the books of the assessee. Even the quantitative details were available in the books of account. As far as sales are concerned the same were duly supported by a statement in Form No. P-5 issued by the State Excise authorities. It is put forth that a written note of the submissions was filed before the appellate authority stating in detail the method of estimating the income on the basis of licence fees. It is put forth that the Tribunal has followed its own decision passed in the earlier years which have been brought on record as Annexures R- 3 and R-4, a perusal of which would go to show that the assessee has been maintaining accounts by following a consistent method of accounts for the past several years and when the accounts maintained by following such methods were accepted on the earlier occasions, the Tribunal set aside such order and particularly the method of estimating the sales on the basis of licence-fees and then applying the net profit rate. The Tribunal had found, as a matter of fact, that the book result on the basis of the books of account was well comparable with Form No. P-5 issued by the Excise authorities.
It is contended that the orders of the Tribunal had attained finality as the same were not challenged by the Revenue in further proceeding. It is put forth that the Tribunal has followed its earlier decision in the assessee’s own case on identical facts and circumstances and no substantial question of law can be said to have arisen. Various decisions have been referred to in the reply which we shall deal with while dealing with the submission of learned counsel for the parties. A reply has been filed by the appellant to the reply filed by the assessee. It is the stand of the Revenue in its reply that the decision of the Tribunal is flawed inasmuch as reliance has been placed on the decision rendered in ITA No. 1/Ind of 1991 wherein reliance was placed on the decision rendered in the case of Jayantilal Kishorilal vs. CIT (1985) 44 CTR (MP) 93 : (1985) 154 ITR 821 (MP). The ratio of the said case is not applicable to the present case. It has been put forth that it was held therein that the contents of the P-5 certificates were not disputed and these were not found to be unreliable, the onus cast on the assessee stood discharged but in the instant case, it has been brought on record in the assessment order that the results shown in the P-5 certificates were not based on any documentary evidence/independent orders/records of the Excise authorities and, hence, the assessee’s own accounts were found to be unreliable, they cannot be placed reliance upon. We have heard Mr. Rohit Arya, learned counsel for the Revenue, and Mr. P.M. Choudhary, learned counsel for the respondent- assessee. It is submitted by Mr. Arya, learned counsel, that when the AO and the first appellate authority had ascribed cogent reasons it was not incumbent upon the Tribunal to probe deep into the matter to find out the justifiability of the reasons given by the forums below but not to rely fully on its earlier decision. It is his further submission that in the earlier orders the facts were quite different and when the assessee founded his case on the base of factum of earlier orders and the same was disputed by the Revenue it was imperative on the part of the Tribunal to delve upon the said facet and not to pass the order in a laconic manner as delineation in this manner immensely exposits perversity of approach. Learned counsel has drawn our attention to the earlier orders which have been brought on record to show how the approach was made and how the obtaining factual matrix was relevant for the said assessment year. It is urged by him that the approach could have been different, had a detailed discussion been adverted to by the Tribunal. To bolster his submission he has placed reliance on the decisions rendered in the cases of Awadesh Pratap Singh Abdul Rehman & Bros. vs. CIT (1994) 119 CTR (All) 1 : (1994) 210 ITR 406 (All) and CIT vs. Bhadra Enterprises (1998) 148 CTR (Ker) 544 : (1997) 228 ITR 717 (Ker). Mr. Choudhary, learned counsel for the respondent, sounding a contra note, has contended that when the Tribunal has followed its own previous decision in respect of the self-same assessee on the self-same facts it cannot be said that there is a perversity of approach. It is urged by him that the colossal complaint made by the Revenue that the order of the Tribunal is a cryptic one has no legs to stand upon inasmuch as the Tribunal on many an earlier occasion dealt with similar issues and based its orders on sound and cogent reasons germane to the issue. It is contended by him that the consistency has to be maintained and when a particular method of accountancy, a recognised one, has been accepted by the Tribunal the same cannot be given a go-by as that would tantamount to paving the path of deviancy without any adequate justification.
It is his proponement that the order passed by the Tribunal does not give rise to a substantial question of law as envisaged under s. 260A of the Act and, therefore, this Court should not interfere in exercise of its appellate jurisdiction as the interference in exercise of appellate jurisdiction is quite limited. At the time of admitting the appeal this Court had framed the following questions of law :
“(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in allowing relief to the assessee by directing that the results as reflected in P-5 certificates be accepted even when as per the material brought on record, such P-5 certificates were found to be based on no documentary evidence and could not be relied upon ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in allowing relief to the assessee by directing that the results declared be accepted even when as per the material brought on record, the book results were not verifiable and the provisions of s. 145 were clearly attracted ?
(3) Whether, on the facts and in the circumstances of the case, the finding of the Tribunal in respect of relief to the assessee was justified merely on consideration of P-5 certificates as against the order relevant evidence liable to be considered in the case along with the materialbrought on record by the AO and the learned CIT(A) against the assessee’s claim in the matter ?”
12. Though three questions have been framed the real hub of the matter, as has been accepted by learned counsel for the parties, is whether the Tribunal should have disposed of the matter of this nature by relying on its previous decisions without addressing itself in detail to the facts of the case and whether such non-advertence amounts to perversity of approach inasmuch as a non-reasoned order in the obtaining facts and circumstances makes the order sensitively vulnerable. Mr. Rohit Arya, learned counsel for the Revenue, while placing reliance on the decision rendered in the case of CIT vs. Bhadra Enterprises (No. 2) (supra), highlighted that in the aforesaid case the ITO after rejecting the books of account had estimated the income. The High Court held that the Tribunal was wrong in observing that the ITO did not reject the books of account but made certain disallowance of expenses because of the absence of vouchers. He has pointed out that the High Court of Kerala in the aforesaid case has recorded a finding that the observation of the Tribunal can be categorised to be one where material has been ignored and the Court in reference proceedings under s. 256 of the Act can interfere. Learned counsel also commended us to a Division Bench decision of the Allahabad High Court rendered in the case of Awadhesh Pratap Singh Abdul Rehman & Bros. (supra), wherein the Bench while dealing with the concept of rejection of books of account held as under : “…………that in the instant case, the account books were rejected because admittedly no stock register was maintained nor were the sales found verifiable in the absence of cash memo. The vouchers of expenses were also not forthcoming and the income returned was ridiculously low as compared to the exorbitant turnover and the extent of the business carried on by the assessee. Taking all these aspects and the material into consideration, the Tribunal had found as a fact that the claim of the assessee for acceptance of the account books was not sustainable. This was a finding of fact and no question of law arose from it.”
13. We have referred to the aforesaid two decisions cited by learned counsel for the appellant to show that under certain circumstances the books of account can be rejected.
14. Mr. P.M. Choudhary, learned counsel, has cited a number of decisions to highlight that if in respect of earlier orders no appeal was preferred, the appeal preferred in respect of the subsequent year is liable to be dismissed. He has referred to the decision rendered in the case of CIT vs. Shivsagar Estate (2002) 177 CTR (SC) 107 : (2002) 257 ITR 59 (SC) wherein the apex Court dismissed the appeal on the ground that no appeal had been taken to the Supreme Court from the earlier orders. In the case of CIT vs. Electra Jaipur (P) Ltd. (1989) 76 CTR (All) 60 : (1989) 177 ITR 86 (All), it had been held that the questions whether the accounts were reliable or not or whether the income, profits and gains could not be properly deduced from the method of accounting regularly employed by the assessee were essentially questions of fact. It is noticeable that the Bench observed as under : “Having heard learned counsel for the parties, we are not satisfied that the order of the Tribunal passed for the year in dispute gives rise to any question of law. Nothing was brought to our notice to suggest that the case for the year in dispute is distinguishable from that of the earlier year when the books of the assessee were accepted as a result of the orders by the appellate authorities.”
15. In this connection learned counsel has also drawn inspiration from the Division Bench decision rendered by the
Delhi High Court in the case of Director of IT (Exemption) vs. Apparel Export Promotion Council (2000) 163
CTR (Del) 131 : (2000) 244 ITR 734 (Del), wherein the Bench held that when there was no material change in the activities of the assessee as compared to the earlier years the question of exemption under s. 11 of the Act which had been examined in earlier years and since there was no change in either the objects or activities of the assessee- society, though the doctrine of res judicata did not strictly apply to income-tax proceedings, in order to maintain consistency the Revenue could not be permitted to rake up stale issues merely because the scope of appeal is wider than reference. Mr. Choudhary has also commended us to a Division Bench decision of Gauhati High Court rendered in the case of CIT vs. Doom Dooma India Ltd. (1994) 117 CTR (Gau) 156 : (1993) 200 ITR 496 (Gau), wherein the Bench while dealing with the concept of s. 145 of the Act has held as under : “It is for the assessee to adopt any recognised method of accounting for his business. The income shall be computed in accordance with the method of accounting regularly employed by the assessee. In other words, it is open to the assessee to opt for such method of accounting as he deems reasonable and appropriate. He may opt to adopt the manufacturing cost price method or the market price method provided the method is followed in regard to both the opening stock and the closing stock. It is not open to him to adopt one method for valuing the opening stock and a different method for valuing the closing stock so as to intentionally suppress the income derived or derivable in the particular previous year. Even where an assessee has adopted a particular method for a period of years, there is no provision of law which prevents him from changing to any other method, provided the change-over is not made in the same assessment year.”
16. Reliance has also been placed on a Division Bench decision rendered in the case of CIT vs. Guttoffnungashutto Sterkrado (1992) 102 CTR (Ori) 56 : (1992) 197 ITR 66 (Ori), wherein A. Pasayat J. (as his Lordship then was), expressing the opinion for the Bench held as under : “We have heard learned counsel for the Department. From the records, we find that a similar dispute, i.e., whether the income has to be assessed on ‘complete contract’ basis, was before the Tribunal for the asst. yrs. 1965-66 and 1966-67. The Tribunal recorded a categorical finding that no defect in the accounts maintained by the assessee was pointed out by the AO and, on the contrary, the profits of the assessee can be correctly determined from the method of accounting adopted by it. With these conclusions, the orders of the CIT passed under s. 263 of the Act were set aside, and the orders of the ITO were restored. It is not in dispute that the Revenue has not assailed the correctness of the conclusions of the Tribunal. The fact situation being identical, the Tribunal followed its earlier judgment and observed that the ‘complete contract’ basis was the correct mode for determination of the assessee’s income and its income can be correctly determined from the method of accounting adopted by it. It, therefore, upheld the direction of the CIT(A) given to the AO for redoing the assessments on the ‘complete contract’ basis. The question that has been referred to this Court is whether the profits can be properly deduced from the method employed by the assessee by maintaining its accounts on ‘complete work’ basis and by the method of dividing the net profit year-wise in proportion to the yearly gross receipts. The question whether the method employed by the assessee by maintaining its accounts on a particular basis will be sufficient for determination of profits is essentially one of fact. Whether the income, profits and gains could or could not be properly deduced from the method of accounting regularly adopted by the assessee is a question of fact. [see Chhabildas Tribhuvandas Shah & Ors. vs. CIT (1966) 59 ITR 733 (SC)]. Therefore, in our opinion, no question of law arises out of the order of the Tribunal……….”
17. Mr. Choudhary, learned counsel, has also placed reliance on the decision rendered in the case of Jayantilal Kishorilal vs. CIT (supra) by the Division Bench of this Court. The Bench was considering certificates issued by the Excise official regarding loss and in that context it held that the same constituted primary evidence in respect of loss certificates having not been disputed by the Department. In that context their Lordships expressed the opinion that the onus on the assessee to prove loss stood discharged. In the case of CIT vs. Lakhani Footwear Ltd. (2001) 167 CTR (P&H) 437 : (2001) 248 ITR 701 (P&H), the High Court of Punjab and Haryana came to opine that the additional reason for not finding the substantial question of law in appeal was that the Revenue did not Challenge the orders passed by the Tribunal for the earlier assessment years in which similar relief was granted to the assessee. In the case of CIT vs. Saddruddin Hussain (2002) 120 Taxman 798 (Raj), the High Court of Rajasthan came to hold that when the assessee had produced the relevant books of account but had not produced the sale vouchers the AO was not justified in invoking the provisions under s. 145(2) of the Act.
18. The heart of the matter is whether the Tribunal has erred in law by following its previous orders only by observing that it has dealt with the issue exhaustively is correct or that amounts to laconic expression of an order warranting interference of the appellate jurisdiction of this Court under s. 260A of the Act. To appreciate the factual scenario whether there is distinction in earlier years and in the present year learned counsel for the assessee has taken us through the orders passed by the Tribunal in ITA Nos. 966 and 967/Ind of 1988 as well as ITA No.1/Ind of 1991. On a perusal of the first order passed in ITA Nos. 966 and 967 of 1988 which relate to the asst. yrs. 1981-82 and 1984-85, we find that the Tribunal had referred to the facts of the case that was mentioned by the CIT(A) in his order. On a perusal of the said facts it transpires that the assessee had taken 13 shops at different places but one set of books of account was kept on shops and copy of the head office P-1 account was filed. The transactions were not supported by vouchers. The assessee did not produce any other document relating to these very shops and the sale proceeds from those shops credited to the books of account kept in the head office. The ITO was of the view that when the shops are situated at different places it was necessary for the appellant to incur expenditure on these shops. However, no document in respect of individual shops was produced. The ITO observed that the assessee had not kept any such record. The ITO expressed the opinion that the accounts were unverifiable. He further observed that the net profit came to 3.47 per cent, and 3 per cent, respectively, for the said two years and that was not justified. The ITO also referred to the fact that the assessee had recorded the purchase of empty bottles which in the liquor business he was required to purchase. A report from the District Excise Officer was obtained wherein it was certified that the sale rates shown in P-5 certificate are exclusive of cost of empty bottles and sealing charges. Considering the totality of circumstances the ITO did not accept the trading results as correct. It was the view of the ITO that notwithstanding the fact that the P-5 certificate is exclusive of the sealing charges and cost of empty bottles the assessee was entitled to recover the same from the customers and a separate account should have been kept, but as the same had not been kept the assessee was liable to be assessed as per the P-5 certificate. Before the Tribunal it was contended that the charges for bottles and sealing charges are not separately recovered by the assessee and the Revenue authorities erred in holding otherwise.
It was further contended that in the earlier years, the contract to sell the liquor was obtained by Gendalal Rai (Individual) and the net profit disclosed was less than three per cent, and the same was accepted by the Department. In the years under consideration the net profit disclosed by the assessee was higher and, therefore, there was no reason to reject the book results. It was put forth that the assessee had to incur expenses more than as shown in the statement under the P-5 certificate was accepted in the earlier years, i.e., for the asst. yr. 1983-84. On an appeal being preferred the appellate authority set aside the order of the AO and remitted the matter to him with certain directions. He had not enhanced the income nor any direction was issued to enhance the income. However, the AO took the assessee’s income for the purpose of receipts shown in the statement P5 certificate resulting in an addition of Rs. 87,403. The Tribunal came to hold that though the jurisdiction of the first appellate authority is coterminous with that of the AO and he can make enhancement and, therefore, the AO could not have made addition higher than the addition made in the original assessment. Thereafter, the Tribunal dealt with the cost of bottles and came to hold that when no expenditure on account of purchase of the bottles has been claimed by the assessee, the assessee’s explanation on the point appears to be reasonable. With regard to sealing charges the assessee had contended that the selling price was inclusive of the sealing charges and it was not separately recovered. It was also the stand of the assessee that in the P-5 statement only some expenses are disclosed and all the expenses incurred by the assessee are not disclosed therein. The Tribunal referred to the statement in P-5 certificate and in that backdrop held as under : “A copy of statement P-5 is available at pp. 3 and 4 of the assessee’s compilation. It contains the details of the selling price as also of some of the expenses incurred by the assessee, for example, expenditure on transport and house rent. A perusal of the items of expenditure, as stated in the said statement, the contention of the assessee appears reasonable. In the ordinary course of business, a trader has to incur other expenses as well. According to the assessee, the expenses on certain heads already referred to above were not disclosed in the statement P-5. We see no reasons to disbelieve the assessee’s version on the point, because in the ordinary course of business, such expenses have to be incurred by any businessman. The inevitable inference, therefore, is that the assessee had incurred some expenses, which are not reflected in the statement P-5. It is worthy of mention here that this stand of the assessee has been accepted by the CIT(A) himself in the appeal for the asst. yr. 1983-84 and we see no reason to take a different view in the years under consideration. It is also not in dispute that in the earlier years the contract to sell liquor was obtained by Gendalal Hazarilal (Individual), who is a partner in the assessee-firm. A comparative chart of the net profit disclosed by Shri Gendalal Rai for the asst. yrs. 1976-77 to 1980-81 has been filed at p. 17 of the compilation. The net profit earned by that individual varies from 2.23 per cent to 2.56 per cent. The net profit disclosed by the assessee-firm during the years under consideration is higher than the net profit of that individual. For that reason also, we are of the opinion that the addition made by the Revenue authorities is not justified.”
19. Now we shall proceed to deal with the order passed for the asst. yr. 1987-88. For the said year the assessee filed a return declaring net loss of Rs. 35,174 on the basis of the books of account which were duly audited. During the course of assessment it was observed by the AO that the assessee had not maintained any books of account for its 21 shops at various places and there was no document relating to the individual shops. In view of this the AO invoked the jurisdiction under s. 145(2) of the Act and asked the assessee to produce P-5 certificate for estimating his gross profit. Eventually, he determined the income of Rs. 6,02,650. An appeal was filed before the CIT(A) and P-5 certificate was also produced. As per P-5 statement the assessee had suffered loss in respect of certain groups of shops as there was enhancement of licensing fee. The appellate authority did not accept the contention in toto but sustained the addition to the extent of Rs. 3,51,930. The Tribunal after considering the rival submissions advanced before it, in para. 6 held as under : “6. From a careful perusal of the record in the instant case we are unable to understand on what basis the AO has estimated the sales at 2-1/2 times the licence fee and adopted a net profit at five per cent of the same. Even the CIT(A) did not furnish correct basis on which he has estimated the income of the assessee at Rs. 3,51,930. Once the book results are rejected after invoking the provisions of s. 145(2) of the Act, the AO must bring some material on record to form the business of the assessee. In the instant case, no effort was made by the Revenue authorities to bring some material on record of accounts of the assessee. The assessee has placed the audited books of account before the Revenue authorities for their perusal and P-5 certificate issued by the Excise Department in which the loss was calculated at a much higher figure than the loss declared book results. If the book results are to be rejected and the income of the assessee is to be estimated on the basis of P-5 certificate, in view of the judgment of the jurisdictional High Court, the loss declared in the P-5 certificates at Rs. 1,94,616 should be assessed against the loss declared by the assessee at Rs. 38,174. Keeping in view the totality of the facts and circumstances of the case, we are of the view that the assessee had suffered a loss in this assessment year due to enhancement of licence-fee and the payment of ceiling charges to the warehouse. Since the assessee has himself offered a lesser loss than the loss computed in P-5 certificate by the Excise Department the loss declared by the assessee should be accepted. We, therefore, set aside the order of the CIT(A) and direct the AO to accept the book results of the assessee in which the net loss was declared at Rs. 38,174.”
It is pertinent to mention here that the Tribunal has placed reliance on the decision rendered in the case of Jayantilal Kishorilal (supra). On a perusal of the aforesaid decision it is perceptible that the P-5 certificate was accepted by the Tribunal. It is quite perceptible that the assessee has been maintaining the accounts for the past several years and he has not maintained the accounts shop-wise. The Tribunal on earlier orders found that the tax documents were well comparable and the P5 certificate was issued by the Excise authorities. It is submitted by Mr. Arya that in the earlier years, the P-5 statement was not disputed but in the present case it is disputed by the Department. A mere dispute, in our considered view, will not give rise or confer jurisdiction on the AO to reject the books of account. On a perusal of the assessment order we find that the AO has catalogued similar grounds and rejected the books of account which were, in the earlier years, accepted by the Tribunal. The grounds enumerated by the AO are that : (i) no books of account are maintained; (ii) the information has been submitted by the assessee to the Excise authorities and, therefore, the P-5 statement could not have been relied upon; (iii) separate stock registers have not been maintained. It is pertinent to state here that these facts were always in issue for a number of years and the Tribunal had decided the matter in favour of the assessee.
The question that falls for adjudication is that in view of the obtaining factual matrix whether a substantial question of law does arise. We have already indicated earlier on that the Tribunal has altered the order by referring to its earlier judgments. Earlier judgments have been brought on record. We have referred to them in extenso. In this context we are of the considered view that it has been held in a series of decisions that the doctrine of res judicata is not applicable but consistency has to be maintained unless there is a manifest distinguishable feature. In the case of Guttoffnungashutto Sterkrado (supra) a Division Bench of the Orissa High Court held that though the principles of res judicata were not strictly applicable to assessment proceedings, it could not be said that the assessee should be subjected to assessment on two different methods. We have also referred to other decisions cited at the Bar. Mr. Arya has seriously contended that the decision rendered in the case of Jayantilal Kishorilal (supra) is distinguishable as certificate was not disputed in that case. In the present case the AO has made a bald observation that the information was supplied by the assessee. No other reason has been ascribed for arriving at such a conclusion. It is also submitted by him that P-5 certificate has been issued by the statutory authority and that has been accepted for many years. Quite apart from the above, the assessee has never maintained the books of account for individual shops. The facts which have been pressed into service by the AO and the appellate authority to reject the books of account are similar to those of the previous years.
22. In view of the aforesaid, we are of the considered opinion that no substantial question of law arises in this appeal. Resultantly, the appeal, being sans merit, stands dismissed without any order as to costs.
[Citation : 263 ITR 679]
