High Court Of Punjab & Haryana
Harcharan Dass Textile Mills (Knitters) vs. CIT & ANR.
Section 260A
Asst. Year 1997-98
N.K. Sud & Adarsh Kumar Goel, JJ.
IT Appeal No. 122 of 2001
9th August, 2004
Counsel Appeared
Akshay Bhan, for the Appellant : Dr. N.L. Sharda, for the Respondent
JUDGMENT
N.K. Sud, J. :
The assessee has filed this appeal under s. 260A of the IT Act, 1961 (for short “the Act”), against the order of the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (for short “the Tribunal”), dt. 15th Nov., 2000 relating to asst. yr. 1997-98.
Assessee had disputed the findings of the Tribunal on three issues. The first dispute relates to the computation of capital gains, the assessee had surrendered its right for allotment of five units of property for a consideration of Rs. 95,86,750. The payments for purchase of those units had been made by the assessee in instalments from time to time. The assessee claims that basic date of purchase for cost indexing for the purpose of computation of capital gain should be taken as the date on which the first instalment was paid as the right to get the flat had accrued on that date. Revenue, on the other hand, claims that the cost indexing in respect of each instalment has to be done separately with respect to the date on which the same had been paid. All the authorities below have concurred with the stand of the Revenue.
The second dispute relates to the addition sustained by the Tribunal to the trading account of the assessee. While framing the assessment, the AO had made assessment of Rs. 15,15,735 by applying a GP rate of 32.95 per cent. On appeal, the CIT(A) reduced the GP rate to 25 per cent.
This resulted in reduction of the total addition to Rs. 5,03,735. On further appeal, the Tribunal observed that there was only one defect pointed out by the AO, i.e., that the wastage claimed by the assessee was on the higher side when compared to the previous years. Accordingly, the Tribunal was of the view that the addition should be reduced by applying the GP rate of 23.5 per cent.
The third issue relates to levy of interest under s. 234B of the Act. After hearing counsel for the parties, we are satisfied that the issue regarding addition to the trading account is a pure question of fact. Counsel for the assessee has not been able to controvert that the wastage claimed during the year was higher when compared to the earlier years. In view of this fact, the authorities below were justified in rejecting the book version and making an estimated addition to the trading account. The question as to what should be the GP rate is a matter of estimate and essentially a question of fact. This Court in its appellate jurisdiction will not substitute its own estimate for the estimate made by the Tribunal unless it is shown that the estimate of the Tribunal is totally arbitrary or perverse.
As far as the dispute about levy of interest under s. 234B of the Act is concerned, the Tribunal has accepted the assessee’s prayer for the reduction consequent to the reduction in income. The matter has been restored to the AO for granting consequential relief. Since the claim of the assessee has been accepted by the Tribunal, nothing more remains for consideration by this Court. However, we are satisfied that the following substantial question of law does arise out of the order of the Tribunal for consideration by this Court : Whether, in the facts and circumstances of the case, the Tribunal was right in holding that, to calculate the long-term capital gain, cost indexing under s. 48 of the IT Act, 1961, had to be made in respect of each payment separately on the basis of date when the same was actually paid?
Admitted.
[Citation : 272 ITR 580]
