- (1.) This appeal under Section 260A of the Income-tax Act, 1961 (for short ''the Act'') has been filed by the assessee against the order dated 13.8.2010, passed by the Income Tax Appellate Tribunal Amritsar Bench, Amritsar (in short ''the Tribunal'') in ITA No. 64 (Asr.) 2010, relating to the assessment year 2006-07.
(2.) The following substantial questions of law have been claimed in the appeal for determination of this Court: (i) Whether the Tribunal has erred in law by failing to appreciate that when the 'Opening stock' and 'Closing stock' of the appellant concern for the year under consideration had been reflected as the 'Closing stock' and ' Opening stock' in the immediate preceding and succeeding year, respectively, which thereafter had not been interfered with by the Revenue/department, therein in light of the judgment of the Hon'ble Supreme Court in the case of M/s. V.K.J. Builders & Contractors (P.) Ltd. v. CIT,2009 318 ITR 204 no adverse inferences as regards the same were liable to be drawn in the hands of the appellant? (ii) Whether the rejecting of the 'Book results' of the appellant for the reason that the latter has not maintained 'Stock records' and its G.P. rate has fallen down as in comparison to that of the immediate preceding year, in the absence of any other discrepancy either as regards the accounts or the method of accounting being followed by the appellant can be sustained in the eyes of law? (iii) Whether the Tribunal has erred in law and facts of the case while sustaining the findings of the CIT(A) and upholding G.P. rate addition to the extent of 1% without giving any cogent reason, and failed to appreciate the very fact that the CIT(A) had drawn adverse inferences as regards the 'Trading results' reflected by the appellant as in comparison to that of the preceding year absolutely at the back of the appellant and without affording the latter any opportunity to explain the reasons for the said comparative fall in the G.P. rate, as well has further erred in restricting the said comparative study to the immediate preceding years, in absolute ignorance of the earlier years where the assessments stood framed under section 143(3) of the Income-tax Act, 1961? (iv) Whether the Tribunal has erred in law and facts of the case in failing to appreciate that as variations in 'Trading results' are attributable to manifold factors, therefore, no adverse inferences as regards minor fluctuations of the same as in comparison to that of the preceding year were liable to be drawn in the hands of the appellant, specifically in the absence of any material which could go substantiate that the appellant had suppressed her 'Trading results?
(3.) The facts, in brief, necessary for adjudication as narrated in the appeal, are that the assessee is an individual and she is engaged in the business of export of sports goods. Return for the assessment year 2006-07 was filed by her on 23.10.2006 declaring her income at Rs. 46,16,718. The return was taken up for scrutiny and statutory notices under Sections 143(2) and 142(1) of the Act were issued to her. During the course of assessment proceedings, the Assessing Officer rejected the books of account of the assessee on the ground that she was not maintaining 'stock records'. According to the appellant, the Assessing Officer drew adverse inference as regards the labour expenses and on the basis thereof concluded that the assessee had inflated labour expenses and suppressed the 'Gross Profit'. The Assessing Officer thereafter estimated the G.P. rate at 14% as against 8.27% as reflected by the assessee and consequently made addition of Rs. 60,00,000. The Assessing Officer, thus, after making certain additions by order dated 31-12-2008 assessed the income of the assessee at Rs.1,10,16,720 as against the 'returned income' of Rs. 46,16,718.;