COMMISSIONER OF INCOME TAX Vs. RATANLAL OMPRAKASH

JUDGEMENT

(1.) THIS is a reference by the Tribunal, Cuttack Bench, under S. 256(2) of the IT Act, 1961 (the Act). The question referred to us is as follows :

(2.) THE dispute relates to the asst. year 1975 -76. The assessee carries on business in Handloom cloth on wholesale basis. According to the return submitted by the assessee firm, the rate of profit was 5.7 per cent. The ITO considered it to be low on the ground that the day -to -day stock account was not maintained, and estimated the rate of profit at 6.25 per cent. This was also confirmed by the AAC. In second appeal, the Tribunal reduced the rate of profit to 6 per cent. An application under s. 256(1) filed by the petitioner having been rejected by the Tribunal, the petitioner moved this Court under S. 256(2). This Court directed the Tribunal to state a case and refer the above question of law. In this Court, Mr. Mohanty, the learned counsel appearing for the petitioner, submitted that the Tribunal should not have rejected the claim of the petitioner that the rate of profit was 5.7 per cent on the basis of comparable cases without disclosing the particulars of such cases. We find that this is not so. From the Tribunal's order it is evident that this question was not at all considered by it, as this point was not at all pressed before the Tribunal. The Tribunal on the other hand held that the assessee had not maintained day -to -day stock particulars and, therefore, it cannot be said that the assessee's books of account were amenable to strict verification.

(3.) AFTER considering the facts and circumstances of this case, the Tribunal reduced the rate of profit to 6 per cent instead of 6.25 per cent. On the finding of the Tribunal, no question of law arises for the opinion of this Court. Even though this Court directed to state case and refer a question of law for opinion, after considering the arguments of the learned counsels for both the sides and on the facts and in the circumstances of the case, we are satisfied that the Tribunal did not rely upon any comparable cases without disclosing the particulars of such cases for estimating the rate of profit of the petitioner -assessee. We, therefore, decline to answer the question referred to us.