Commissioner of Income Tax, Chandigarh-II vs R.P.S. Hotels (P.) Ltd.

Adarsh Kumar Goel, J.—The revenue has preferred this appeal u/s 260A of the income tax Act, 1961 (for short, ""the Act"") against the

order of the Income Tax Appellate Tribunal, Chandigarh Bench-A dated 31-5-2005 passed in IT Appeal No. 249/Chandi/2003 for the

assessment year 1999-2000 proposing to raise following substantial question of law :-

Whether on the facts and in the circumstances of the case and in law, the order of the ITAT is perverse as the ITAT has failed to appreciate the

fact that the CIT(A) restricted the food cost ratio to 55 per cent only on conjectures and surmises and without any evidence, whereas the

Assessing Officer had based its order on the basis of results of 16 hotels/restaurants.

The assessee is running a hotel. The assessee claimed cost of raw material for the food, which was found by the Assessing Officer to be excessive

having regard to the prevalent norms in hotel business. The Assessing Officer accordingly made addition to the declared income. The CIT(A)

deleted the addition by holding that in the absence of any specific material, books of accounts should be accepted. This view has been upheld by

the Tribunal.

Learned counsel for the revenue fairly states that appeal of the revenue against order of the Tribunal in the case of Dua & Associates, which has

been followed in the present case, has been dismissed by this Court being (CIT v. Dua & Associates (P.) Ltd. [2008] 172 Taxman 20). In view of

above, this appeal is dismissed.