Commissioner of Income Tax vs Dharam Pal Singh and Company

By means of the present appeal filed u/s 260A of the income tax Act, 1961 (hereinafter referred to as the Act), the Commissioner of Income Tax, Allahabad has raised the following three substantial questions of law, said to be arisen out of the order of income tax Appellate Tribunal, Allahabad dated 24-5-1999. Whether on the facts and in the circumstances of the case SS 44AC was not applicable in the case?

Whether on the facts and in the circumstances of the case, the Tribunal and the authorities below were justified In deleting the additions of Rs. 22,44,500?

Whether on the facts and in the circumstances of the case, the Tribunal was justified in confirming the order of Commissioner of income tax (Appeals) as far as it relates to reduction in G.P. Rate?

We have heard Shri A.N. Mahajan, learned Standing Counsel appearing for the revenue and Shir Shakeel Ahmad, learned counsel appearing for the respondent assessee and have perused the order of the Tribunal.

We find that so far as the first question is concerned, the Tribunal has applied the decision of the Apex Court in the case of Commissioner of Income Tax, Hyderabad Vs. M/s. P.J. Chemicals Ltd., and had accordingly held that the income tax has to be computed as per the provisions of Section 28 to Section 43B of the Act and not as per the provisions of Section 44AC of the Act. As the order of the Tribunal is in confirmity with the decision of the Apex Court in the case of P.J. Chemicals (supra), we do not find any legal infirmity in the order of the Tribunal, and therefore, the first question of law cannot be said to be a substantial question of law.

So far as the second and third questions raised by the revenue are concerned, we find from the order of the Tribunal that the appellate authority had reduced the net profit rate from 6.5% to 6% and no Arguments were advanced by the departmental representative, who had appeared before the Tribunal on behalf of the respondent assessee in respect of the salary. Thus, the second and third questions cannot be sought to be raised out of the order of the Tribunal. Even otherwise, whether the G.P. rate of 6.5% or 6% should be applied, depends upon the facts and circumstances of each case and it cannot be said to be a substantial question of law. The appeal has no merit and is, accordingly, dismissed in limine.