Commissioner of Income Tax I vs Sarswati Construction Co.

Sonia Gokani, J.—Challenging the order of the Income Tax Appellate Tribunal dated 30.08.2012, this tax appeal is preferred proposing following substantial question of law for our consideration: Whether ITAT was justified in reducing the disallowance to 7.5%, without any basis, while AO has also stated that even after 20% of disallowance, GP of assessee becomes reasonable and at par with other parties?

We have heard learned counsel Mr. Desai for the department. He has fervently contended that the Tribunal, without application of mind, has enhanced the percentage by 2.5% than what the CIT(A) had awarded, and this was done without taking into account all the contentions of the department.

Having considered the material on record and with the assistance of the learned counsel, we notice that the Assessing Officer had chosen to disallow 20% on account of invariable expenses. However, when the matter travelled to the CIT(A) as the assessee was aggrieved by such disallowance, the same was restricted to 5% of total expenses. When challenged before the Tribunal, it was made to 7.5% by saying that the same would meet the end of the justice. We notice that the issue is predominantly examined on the basis of the factual matrix presented before these authorities. No question of law arises. This tax appeal is, therefore does not require any consideration. The same is dismissed.