Mohan Sukhani vs Assistant Commissioner of Income Tax, Jaipur

We heard Mr. Gunjan Pathak, the counsel for the assessee. Two fold submission was canvassed by the counsel. Firstly, he submitted that the Commissioner of income tax (Appeals) on consideration of the entire facts and circumstances of the case took the holistic view based on lesser gross profit rate declared by some of the similarly situated assessees and, accordingly, estimated the gross profit rate of 35 per cent and, thus, the income tax Appellate Tribunal was not justified in interfering with the order of the Commissioner of income tax (Appeals) on that count. Secondly, the counsel would submit that the assessee being 100 per cent exporter, the interest earned during the course of business ought to have been included in total turn over for the purposes of deduction u/s 80HHC of the Income Tax Act, 1961. He submitted that the decision of the Bombay High Court in the case of Commissioner of Income Tax Vs. Bangalore Clothing Co., has no application to the facts of the present case as assessee is engaged in the business of 100 per cent export.

None of the contentions gives rise to any substantial question of law.

With regard to the first contention raised by the counsel for the assessee, it may be noticed that the Tribunal took into consideration the gross profit rate at 34.55 per cent declared by the assessee and also the gross profit rate declared by M/s Garment Crafts India Limited which was at 41.73 per cent. The Tribunal observed that in the concerned financial year, the results of the assessee were better than the preceding year. In view of the admitted position that the assessee was not maintaining records, on over-all consideration of the facts and circumstances of the case, the Tribunal restored the gross profit rate applied by the assessing officer, The estimation of gross profit rate having some basis is a finding of fact. The Tribunal has taken into consideration all relevant aspects and it cannot be said that the said finding of fact is vitiated by any error of law.

In so far as the second contention of the counsel for the assessee is concerned, suffice it to say that, the Tribunal has treated the interest income of the assessee as income from other sources. The Tribunal observed that consistently the income of interest earned by the similarly situated exporters is being treated as income from other sources and not the business income. The Tribunal has endeavored to find out as to what constitutes the total turn over and referred to some of the decisions of the High Courts. The consideration of the aspect of the interest income by the Tribunal cannot be said to suffer from any legal flaw. No substantial question of law arises in the appeal. The income tax Appeal is dismissed in limine.