Judgment :- P.P.S. JANARTHANA RAJA 1. The appellant has filed the above Tax Case Appeal against the order of the Income Tax Appellate Tribunal, Chennai B Bench dated 27.11.2003 in ITA.No.482/Mds/1997. 2. The above appeal is filed by raising three questions of law. But when the appeal came up for admission on 12.07.2004, this Court admitted on the following two substantial questions of law: 1. Whether on the facts and in the circumstances of the case, the Tribunal was right in simply relying upon the statement of the husband of the appellant alone is correct in law when no statement was recorded from the appellant? 2. Whether on the facts and in the circumstances of the case the Tribunal was right in adopting the gross profit at 8% without assigning any valid reasons or basis to arrive at such gross profit contrary to the gross profits shown in the books of accounts? 3. The assessee is the Proprietrix of M/s Selladurai Nadar Marketing Centre and engaged in the business of stainless steel utensils and other consumer durables. The assessment year is 1993-1994 and the corresponding accounting year ended on 31.03.1993. The assessee filed her return of income on 30.11.1994 admitting a loss of Rs.89,265/- and the said return was processed under Section 143(1)(a) of the Act. Later intimation was also sent to the appellant/assessee. Notice under Section 143(2) was issued on various dates. Subsequently, a raid was conducted in the business and residential premises on 13.10.1993 under Section 132 of the Income Tax Act. Various discrepancies were noted at the time of the raid mainly in the form of deficiency in the stock. The assessees husband had given a statement and admitted the discrepancy in the stock of the business carried on by himself and his wife and offered a sum of Rs.8,00,000/- in the hands of the wife for the assessment year 1993-1994 under Section 132(4) of the Act. The assessment was completed under Section 143(3) and determined the total income at Rs.7,10,740/-. While determining the said total income, the assessing officer has made addition of Rs.8,00,000/-as the husband had offered the said amount in the hands of the wife under Section 132(4) of the Act in respect of the deficit stock for the assessment year 1993-1994. Further, the assessing officer also adopted gross profit at 15% on the statement made by the husband before the officer. Further, the assessing officer also adopted gross profit at 15% on the statement made by the husband before the officer. Aggrieved by that order, the assessee has filed an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) deleted the addition of Rs.8,00,000/- and sustained the addition of Rs.50,000/-and also was of the view that the profit in the line of business could not be more than 5% and therefore, fixed the gross profit at 5% as against 15% adopted by the assessing officer. Aggrieved by that order, the revenue has filed the appeal before the Income Tax Appellate Tribunal. The Appellate Tribunal confirmed the ad-hoc addition of Rs.6 lakhs as the assessees husband in his statement had admitted the value of suppression of stock and also fixed the gross profit at 8% on the retail sale of stainless steel vessels and Aluminum products etc., as against 5% fixed by the CIT (Appeals). Aggrieved by that, the assesee has filed the present appeal. 4. The learned counsel appearing for the assessee vehemently contended that the Tribunal ought not to have estimated the gross profit at 8% as against 2% admitted by the assessee. He further submitted that the Tribunal is wrong in making addition of Rs.6,00,000/- in respect of suppression of sale and further there was no basis for making such addition and the assessing officer is wrong in making addition on the ground that the assessees husband gave sworn statement at the time of raid. He further submitted that the appellants husband was under the custody of the official for a long time and therefore, the statement obtained from her husband was under threat and the statement was given only at the instance of the department. Hence, the order passed by the Tribunal is not in accordance with law and the same has to be set aside. 5. The Standing Counsel appearing for the revenue submitted that the Tribunal has considered all the facts and circumstances of the case and correctly adopted 8% gross profit on the appellants total sales and also correctly made addition, which is based on valid materials and evidence. Though enough opportunity was given to the assessee to prove the case, she has not produced any valid material before the authorities below to substantiate her claim. Though enough opportunity was given to the assessee to prove the case, she has not produced any valid material before the authorities below to substantiate her claim. Therefore, the order passed by the Tribunal is in accordance with law and the same has to be confirmed. 6. Heard the learned counsel appearing on either side and perused the documents available on record. A raid was conducted under Section 132 of the I.T. Act in the business premises of the appellant/assessee on 13.10.1993. Actually the business of the appellant/assessee was carried on by her husband one Thanaseelan. The said Thanaseelan had given sworn statement before the Income Tax Department and he had also admitted the discrepancy in the business carried on by himself and his wife and in his statement, he stated that he resorted to sales suppression and that the percentage of such suppression constitutes about 15 to 20% of the total sales turn over and further categorically stated that the deficit stock and sales suppression in the business works out to Rs.6,00,000/-during the assessment year. Later he has retracted the statement given before official of the revenue. Even though an opportunity was given to the appellant/assessee, she was silent and no explanation was forthcoming from her. It is also seen that the business of the appellant/assessee was managed by her husband. After taking into consideration of the facts, the Tribunal in paragraph 5 of the order, has held as follows: "5. We have heard the rival submissions and perused the material placed on record. We find that the husband of the assessee has disclosed in his sworn statement, the deficit stock and sales suppression at Rs.6 lakhs. The assessee was asked to explain the deficit in stock and sales suppression as stated in the sworn statement of her husband but the assessee remained silent when this opportunity was afforded to her. Hence, the Assessing Officer had no other material to rely upon other than the sworn statement which was in his possession. Further it is noticed that the business of the assessee was managed by her husband and he was incharge of the business. Therefore, he was in the know how of all the activities of the business of the assessee." From the facts, it is clear that the assessees husband has voluntarily given the sworn statement. Further it is noticed that the business of the assessee was managed by her husband and he was incharge of the business. Therefore, he was in the know how of all the activities of the business of the assessee." From the facts, it is clear that the assessees husband has voluntarily given the sworn statement. There is no dispute that the assessees husband is incharge of the business of the assessee. It has been made categorical in his statement that the sales suppression in assessees proprietory concern M/s Selladurai Nadar Marketing Centre was in the range of 15 to 20% and the approximate gross profit ratio was in the range of 15% and further he has stated that the amount of sales suppression in the said concern would works out to around Rs.6 lakhs for the assessment year. The said statement was also placed before the assessee and also opportunity was given to the assessee to render evidence to rebut the sale. But the assessee was silent without producing any material evidence. Therefore, the Tribunal came to the conclusion that the assessing officer was correct in making the addition. The Commissioner of Income Tax (Appeals) has not given any proper reason. Therefore, the finding given by the Tribunal is based on valid materials and evidence. The learned counsel appearing for the appellant/assessee was also unable to give any material evidence to take a contrary view to that of the Tribunal. It is a question of fact. It is not a perverse order. In such circumstances, we do not find any error or irregularity in the order passed by the Tribunal warranting interference and we answer the first question in favour of the revenue and against the assessee. 7. In respect of the second question, the dispute is relating to estimation of gross profit. The assessee admitted in her return that the gross profit is at 2%. The assessing officer adopted the gross profit at 15%. The CIT (Appeals) has fixed the gross profit at 5%. By averaging the above, the Tribunal has fixed the gross profit at 8% and in paragraph 6 it has held as follows: "6. On consideration of the entire matter, we are of the considered opinion that the G.P. Rate adopted by the Assessing Officer at 15% is very high. The CIT (Appeals) has fixed the gross profit at 5%. By averaging the above, the Tribunal has fixed the gross profit at 8% and in paragraph 6 it has held as follows: "6. On consideration of the entire matter, we are of the considered opinion that the G.P. Rate adopted by the Assessing Officer at 15% is very high. The CIT (Appeals) has taken the G.P. Rate at 2% which is very low compared to the market conditions. Taking into consideration that the assessee is a lady and that this is the first year of business of the assessee, we are of the opinion that the G.P. Rate on retail sale of Stainless steel vessles and Aluminium products etc., shall be at 8%. Accordingly, we direct the Assessing Officer to take the G.P. Rate in this case at 8% (eight) and conclude the assessment as per law." So all the authorities below had determined gross profits only on estimated basis. There is no material available for us to take a contrary view of the Tribunal. In the absence of any valid material on record, we are of the view that the Tribunal is correct in fixing the gross profit at 8%. We do not find any error or illegality in the order passed by the Tribunal warranting interference. In these circumstances, the second question of law is answered against the assessee and in favour the revenue. In these circumstances, we do not find any merit in the appeal filed by the assessee and the same is dismissed. No costs.