IN THE HIGH COURT OF DELHI AT NEW DELHI 
 . 
 . 
 . 
   ITA 49/2012  
 . 
 . 
 . 
 CIT             ..... Appellant 
 . 
 Through Mr. Sanjeev Rajpal, sr. standing 
 counsel 
 . 
 . 
 . 
 versus 
 . 
 . 
 . 
 . 
 . 
 ARVIND KUMAR MODII         ..... Respondent 
 . 
 Through 
 . 
 . 
 . 
 CORAM: 
 . 
 HON'BLE MR. JUSTICE SANJIV KHANNA 
 . 
 HON'BLE MR. JUSTICE R.V.EASWAR 
 . 
 . 
 . 
 O R D E R 
 . 
      23.01.2012 
 . 
 . 
 . 
 The findings recorded by the tribunal are factual.  Ld. counsel for 
 the appellant-revenue submits that the GP rate for the assessment year 
 2005-06 was substantially lower than the earlier years and therefore 
 rejection of books of accounts was justified. 
 . 
 2. The turnover and GP rate of the assessment year in question and 
 2002-03 onwards are as under : 
 . 
 Assessment Year 
 . 
 Sales 
 . 
 Gross Margin % 
 . 
 2002-03 
 . 
 3.74 Crores 
 . 
 14.37% 
 . 
 2003-04 
 . 
 7.12 Crores 
 . 
 15.75% 
 . 
 2004-05 
 . 
 7.88 Crores 
 . 
 20.11% 
 . 
 2005-06 
 . 
 11.56 Crores 
 . 
 11.08% 
 . 
 . 
 . 
 3. The respondent-assessee had given detailed explanation for the 
 decline in GP rate including competition in the market, the factum that 
 the turnover had increased substantially and that the assessee had to 
 make re-payment to the major purchasers namely Sarita Handa Exports and 
 Sarita Handa Exports Pvt. Ltd.  on account of change in excise duty.  The 
 repayment question has been specifically examined and the explanation of 
 the assessee accepted.  It is not the case of the Revenue that there is 
 any material to show that re-payment was not made or it is a fictitious/ 
 wrong entry.  Thus the factual details have been considered, elucidated 
 and decided in the order of the tribunal. 
 . 
 4. The Assessing Officer had recorded that the assessee had charged 
 lesser price on certain items sold to Sarita Handa group with reference 
 to two varieties of fabrics.  The respondent-assessee had sold fabric to 
 them at the rate of Rs.115 and 105 per sq.mtr, whereas fabric was sold to 
 third parties at Rs.120 and 115 sq.mtr.  Explanation given by the 
 assessee was that Sarita Handa group were major and bulk purchasers and 
 the quantity of the fabric sold to third parties were minimal, compared 
 to the quantities sold to them. 
 . 
 5. In view of the aforesaid factual position, explanation given and 
 accepted, we do not find any substantial question of law arises on the 
 first issue.  The findings are factual and cannot be treated as perverse. 
 . 
 6. Addition of Rs.7,47,345/- was made by disallowing commission 
 payment.  The CIT(Appeals) and the tribunal have recorded the finding 
 that the Assessing Officer had asked the respondent assessee to produce 
 the parties only on 28th December, 2007 and the assessment order was 
 passed on 30th December, 2007.  The CIT(Appeals) and the ITAT have also 
 recorded a finding that the authorized representative of three out of 
 five parties to whom commission was paid had appeared before the 
 Assessing Officer but the Assessing Officer did not take papers on record 
 and insisted that the parties should appear in person.  Summons were 
 issued to the said parties to appear in person or through authorized 
 representative.  The respondent assessee had furnished full details, PAN 
 number, vouchers, invoice number etc. and payments were made by cross 
 cheque.  On second question also we do not find any substantial question 
 of law arises.  The findings are findings of facts. 
 . 
 Accordingly, the appeal is dismissed.  No costs. 
 . 
 . 
 . 
 . 
 . 
 SANJIV KHANNA, J 
 . 
 . 
 . 
 . 
 . 
 . 
 . 
 R.V.EASWAR, J 
 . 
 JANUARY 23, 2012 
 . 
 vld 
 . 
 . 
 . 
 . 
 . 
 . 
 . 
 $  9 to 12 
 .