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Asstt. Commissioner of Income Tax, Central Circle-9, New Delhi Room No. 357, ARA Centre, E-2 vs. M/s Moets Bar-B-Cue,50, Defence Colony Market, New Delhi 110 024 PAN/GIR NO. : AAAFM7936M
May, 23rd 2012
                                                             ITA NO. 1285/DEL/2012

                        DELHI BENCH "E", NEW DELHI
                           I.T.A. No. 1285/Del/2012

                                A.Y. : 2007-08

Asstt. Commissioner of Income         vs. M/s Moets Bar-B-Cue,
Tax,                                      50, Defence Colony Market,
Central Circle-9, New Delhi               New Delhi ­ 110 024
Room No. 357, ARA Centre, E-2             (PAN/GIR NO. : AAAFM7936M)
Jhandewalan Extn.,
New Delhi
(Appellant )                               (Respondent )

           Assessee by                 :   Sh. Anil Jain & Sh. Rishab Jain,
          Department by                :   Sh. R.S. Negi, Sr. D.R.

     This appeal by the Revenue is directed against the order of the

Ld. Commissioner of Income Tax (Appeals)-XXXII, New Delhi                 dated

03.1.2012 pertaining to assessment year 2007-08.

2.   The grounds         raised in the appeal by the       Revenue read as


           "1.     That the Ld. Commissioner of Income Tax (Appeals)

                   erred in law and on facts of the case in deleting the

                   addition of ` 16,20,725/- by holding that the GP rate of

                                                        ITA NO. 1285/DEL/2012

                24.54% as shown by the assessee on the basis of

                audited accounts was to be accepted instead of GP

                rate of 30% applied by the Assessing Officer             for

                making the addition.

          2(a). The order of the Ld. Commissioner of Income Tax

                (Appeals) is erroneous and not tenable in law and on


            (b). The appellant craves leave to add, alter or amend any

                / all    of the ground of appeal before or during the

                course of the hearing of the appeal."

3.    In this case Assessing Officer noted that during the year under

consideration the assessee declared GP rate in Restaurant business @

24.93%.    In the absence of complete supporting evidences, and in

the absence of justification of GP ratio applied, the GP rate was

considered @ 30% as applied in the earlier years.         The GP on the

total sales of ` 3,19,65,579/- by applying GP ratio 2 30% was worked

out at ` 95,90,081/-.      The undeclared GP computed in view of the

above discussion was worked out as under:-

          GP worked out as above        -   95,90,081/-
          Less GP declared              -   79,69,358/-
          Undisclosed GP                -   16,20,725/-

                                                         ITA NO. 1285/DEL/2012

4.   Upon assessee's appeal Ld. Commissioner of Income Tax

(Appeals) noted that Assessing Officer      has not given any specific

reason for estimation of GP @ 30% as against the GP rate of 24.54% as

declared by the assessee. He has simply        stated that in absence of

justification of the GP declared, the GP is estimated at 30% as in earlier

years.   Ld. Commissioner of Income Tax (Appeals) further noted that

however the estimation made in earlier years has been knocked down

in appeal by the Tribunal. The tribunal had found the GP rate declared

by the assessee as per their audited accounts as reasonable for the

immediately preceding year at 20.53% whereas the assessee has

declared GP rate of 24.54% in the instant year which is higher by 4.1%

as compared to the immediately preceding year.         Ld. Commissioner

of Income Tax (Appeals) further observed that though the principle of

res judicata does not apply to the income tax proceedings, the

Assessing Officer has not brought any adverse material on record to

disturb the book results shown by the assessee during the relevant

previous year.   Like in A.Y. 2006-07, no unrecorded sales have been

found during the instant assessment year.                 Therefore, Ld.

Commissioner of Income Tax (Appeals) held that following the

reasoning given by the ITAT in the above cited order in the assessee's

own case, it is held that it will not be proper to presume that the

                                                        ITA NO. 1285/DEL/2012

assessee earned a GP rate of 30% in the instant A.Y. without there

being any material indicating this fact.    Ld. Commissioner of Income

Tax (Appeals) concluded that the GP rate as declared by the assessee

on the basis of audited accounts at 24.54% is to be accepted in the

absence of any adverse material on record.         Ld. Commissioner of

Income Tax (Appeals) observed that the addition made by the

Assessing Officer   was merely on presumption and therefore, not

sustainable and accordingly deleted.

5.   Against the above order the Revenue is in appeal before us.

6.   We have heard the rival contentions in light of the material

produced and precedent relied upon.        We find that Assessing Officer

in this case has not rejected the books results of the assessee, nor has

given any specific reasoning why the GP rate adopted by the assessee

should be disturbed.    Assessee has shown GP rate 24.54%. 20.53%

GP was accepted by the Tribunal in the assessee's own case in earlier

years.    Thus, nothing has been brought on record to prove lacunae

in the assessee's books of accounts, neither any reason has been

stated why the GP rate should be disturbed and GP should be

estimated at 30%.      We find that there is no cogent basis in the

Assessing Officer's decision in making the addition in this case.         In

our considered opinion, Ld. Commissioner of Income Tax (Appeals) has

                                                        ITA NO. 1285/DEL/2012

taken a right view in the matter which does not need any interference

on our part. Accordingly, we uphold the same.

7.    In the result, the appeal filed by the Revenue stands dismissed.

      Order pronounced in the open court on 16/5/2012, upon
conclusion of hearing.

      Sd/-                                              Sd/-

 [A.D. JAIN]                                [SHAMIM YAHYA]
JUDICIAL MEMBER                             ACCOUNTANT MEMBER

Date 16/5/2012
Copy forwarded to: -
1.    Appellant 2.       Respondent         3.    CIT   4.     CIT (A)
5.    DR, ITAT

                             TRUE COPY
                                                  By Order,

                                                    Assistant Registrar,
                                                    ITAT, Delhi Benches

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