R.K. Gulati, J. - (1.) THE Commissioner of Income-tax, Allahabad, through this application has desired that under Section 256(2) of the Income-tax Act, 1961, the Income-tax Appellate Tribunal, Allahabad Bench, be directed to draw up a statement of the case and refer the following two questions which are said to be questions of law, to this court for its opinion : " (1) Whether the Income-tax Appellate Tribunal is justified to uphold the order of the learned Commissioner of Income-tax (Appeals) and dismissing the appeal filed by the Revenue in spite of the fact that there was no control over the sale price and the sales were not verifiable and the estimate of sales at 21/2 times of the licence money and the application of net profit rate at 9 per cent. was based on the finding of the Income-tax Appellate Tribunal in the case of Sri Madan Mohan Prasad v. ITO in I. T. A. No. 2281 (All)/1976-77 for the assessment year 1973-74 vide order dated April 27, 1978 ? (2) Whether the Income-tax Appellate Tribunal was justified in dismissing the appeal of the Revenue in spite of the fact that in the case of A.P. Singh v. Abdul Rehman and Brothers, the Income-tax Appellate Tribunal vide order dated September 17, 1991, in I.T.A. No. 1379(All)/ 1988 for the assessment year 1986-87 dismissed the assessee's appeal and upheld the estimate of sales at 21/2 times of the licence fee and application of net profit rate of 5 per cent on estimated sales ?"
(2.) IN respect of the assessment year 1975-76, the assessee filed its return-declaring a loss of Rs. 2,42,589. The initial assessment which was made at Rs. 1,60,000 by estimating the sales at Rs. 30 lakhs and applying the net profit of 5 per cent., was set aside in appeal by the Commissioner of INcome-tax (Appeals) with the direction to make the assessment afresh after taking into account the evidence produced by the assessee. It may be observed that during the previous year relevant to the assessment year in dispute the assessee was a country liquor contractor and had 31 liquor shops at different places. In the remand proceedings, the Income-tax Officer once again rejected the account books of the assessee for the reasons stated in his order and worked out the net profit at Rs. 4,47,480 and in doing so, he estimated the sales at Rs. 49,72,000 and applied a net profit rate of 9 per cent. thereon. The sales were estimated at 2.5 times of licence money which was Rs. 19,88,950. In taking this view, the Income-tax Officer referred to a decision of the Income-tax Tribunal in the case of Sri Madan Mohan Prasad v. YTO in I. T. A. No. 2281 (All)/ 1976/77, for the assessment year 1973-74, in which, it was allegedly held that in the cases of country liquor contractors where proviso to Sub-section (1) of Section 145 of the Act is invoked, the sales are generally estimated 2-3 times the licence money and net rate of profit is applied. The assessee went in appeal against the assessment order where the additions made to the returned income were deleted and the Income-tax Officer was directed to accept the book version. Against the appellate order, the Revenue preferred a second appeal before the Income-tax Appellate Tribunal, but without any success. Thereafter, the Revenue made an application under Section 256(1) of the Act for reference of the aforesaid questions to this court, which was also rejected by the Income-tax Appellate Tribunal, Hence, this application seeking directions from this court as already indicated hereinabove.
(3.) WE have heard learned counsel for the parties. The only submission which was made by learned standing counsel on behalf of the Revenue was that the Income-tax Appellate Tribunal was not justified in departing from its own view which was said to have been taken by it in similar matters to which reference has been made in the questions set out earlier. The copies of the orders of the Income-tax Appellate Tribunal in those matters were not made available to us, nor have they been brought on record. In the absence of those orders it is difficult for this court to express any opinion as to the relevance of those decisions on the facts of the instant case. It has already been observed that the Income-tax Officer in making the assessment had referred to a decision of the Income-tax Appellate Tribunal in I. T. A. No. 2281/(All)/ 1976-77, in the matter of Madan Mohan Prasad (supra), but it appears that the said order of the Appellate Tribunal was not even available to the Income-tax Officer and he seems to have relied upon that decision without looking into that order for himself. It is evident from the office Note-3 set out at the bottom of the assessment order dated March 5, 1986, which reads as under ; " 3. Several letters were sent to the Income-tax Officer, "E" Ward, Circle I, Varanasi, and D. R. Income-tax Appellate Tribunal, Allahabad, requesting them to send to me a copy of the Tribunal's order referred to in the body of the order. But no reply was received. Thus, relying on the observations of the learned Inspecting Assistant Commissioner in his letter C. No. 9/144B of 1978-79, dated August 17, 1978, the assessment has been completed." ;