- (1.) This appeal has been preferred by the asses-see under section 260A of the Income-tax Act, 1961 (in short, "the Act"), against the order dated March 19, 2012, annexure A. 3 passed by the Income-tax Appellate Tribunal "B" Bench, Chandigarh (in short, "the Tribunal") in I.T.A. No. 264/CHD/2011, for the assessment year 2007-08, claiming the following substantial questions of law (annexure "A" at page 79 of the paper book): "1. Whether the books of account could be rejected merely on the premises that separate record of the Government paddy and own paddy was not maintained that too in the absence of any specific defect in the books of account? 2. Whether the addition on account of low yield of rice is sustainable without having any comparable stance and by disapproving the results of the appellant in earlier years? 3. Whether the authorities misdirected in making addition on account of paddy milled outside the books of account by taking the yield of bye-product as benchmark to calculate the yield of the main product and without appreciating that the supplies were also made to the Government agencies who never disapproved about the yield? 4. Whether the findings recorded by the authorities below are perverse and contrary to the evidence available on record?" The facts in brief, necessary for adjudicating the controversy involved, as narrated in the appeal, may be noticed. The assessee is deriving income from two concerns, M/s. Lajja Ram Pramod Kumar and M/s. Lajja Rice and Oil Mills. He is engaged in the business of commission agent, milling of paddy and selling of the products, namely, rice, rice bran, husk and phak. During the assessment year 2007-08, the assessee had shown a gross profit of Rs. 24,75,369 at the rate of 7.39 per cent Therefore, the assessee was asked to file the comparative figures of gross profit for the last year and while invoking the provisions of section 145(3) of the Act, the books of account of the assessee were rejected by the Assessing Officer and additions had been made on different grounds, vide order dated November 18, 2009, annexure A. 1. Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) (CIT(A)). The Commissioner of Income-tax (Appeals), vide order dated January 31, 2011, annexure A. 2 partly allowed the appeal while upholding all the additions though reduced in quantum and rejecting the books of account. Still not satisfied with the order, the assessee filed an appeal before the Tribunal. Vide order dated March 19, 2012, annexure A. 3, the Tribunal concurred with the findings recorded by the Commissioner of Income-tax (Appeals) and dismissed the appeal. Hence, the present appeal by the assessee.
(2.) Learned counsel for the appellant-assessee submitted that the decline of growth profit rate by itself cannot be a ground for rejection of books of account Reliance was placed on the judgment in M. Durai Raj v. CIT, 1972 83 ITR 484 (Ker.) in support of the submission. Learned counsel further relied upon the judgments in International Forest Co. v. CIT, 1975 101 ITR 721 (J & K), CIT v. Bharat Rice Mills,2001 250 ITR 584 (P & H), CIT v. R.K. Rice Mills, 2009 319 ITR 173 (P & H), Jhandu Mal Tara Chand Rice Mills v. CIT, 1969 73 ITR 192 (P & H) and CIT v. Bindals Apparels, 2011 332 ITR 410 (Delhi) to submit that the findings recorded by the Tribunal sustaining the additions made by the authorities below were uncalled for and, therefore, substantial questions of law as claimed arise in the appeal.
(3.) On the other hand, the learned counsel for the respondent submitted that the findings of fact recorded by the authorities below did not call for any interference as they were based on appreciation of evidence on record.;