Judgment :- Bhaskar Bhattacharya, J. This appeal under Section 260A of the Income-tax Act is at the instance of an assessee and is directed against an order dated May 5, 2004, passed by the Income-tax Appellate Tribunal, “C” Bench, Kolkata in I.T. (SS) A No.116 (Kol) of 2002 for the block Assessment Year 1989-90 to 1989-1999 and from 1st April, 1998 to 19th August, 1998 dismissing the appeal preferred by the assessee. Being dissatisfied, the assessee has come up with the present appeal. The facts giving rise to filing of this appeal may be summed up thus: a) The assessee is a manufacturer of cement in his mini-cement plant in the District of Hazaribagh, Bihar. b) There was a search in the factory and some papers were found in Varanasi, at the residence of one of its Director, namely, Anil Agarwal. While deposing before A.D.I. (Investigation) Rachi, one G.C. Agarwal, another Director of the Company with a view to buying peace, declared a sum of Rs.7.50 lac and further declared an estimated G.P. of 7%. The controversy arose when the Assessing Officer estimated the G.P. as 10% for which no basis was given and no comparative case was also cited by the Assessing Officer. c) Being dissatisfied, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals). The assessee submitted financial results of wholesale dealers of cement where the G.P. rate varied between 2.54% and 4.91%. It was contended by assessee that the rate of G.P. declared by the assessee was much higher than what was disclosed by others in the same field of business. The assessee further submitted that the gross profit rate shown by one Gupta Cement Stores, Varanasi for several years would indicate that the gross profit rate disclosed by Gupta Cement Stores varied from 2.54% and 3.92%. Similarly the gross profit rate shown by one Jainco Sales, Varanasi indicated variation of the Profit rates between 3.65% and 3.67%. Similarly, in the case of Ashwarya Trading Co., Gazipur, the gross profit rate was 4.91%. d) The Appellate Authority came to the conclusion that the Assessing Officer had given no reason for estimating the gross profit and that he had not even mentioned about any seized material or evidence or any comparable case on which he was relying for estimating the gross profit rate of 10%. d) The Appellate Authority came to the conclusion that the Assessing Officer had given no reason for estimating the gross profit and that he had not even mentioned about any seized material or evidence or any comparable case on which he was relying for estimating the gross profit rate of 10%. Similarly, the assessee was also asked specifically to indicate the basis on which the gross profit rate of 7% was estimated and claimed. The assessee’s representative was unable to give any reply to this question and in such circumstances, the Appellate Authority was of the view that gross profit rate should be estimated at 8.5% as reasonable gross profit rate on the basis of which the undisclosed income for the relevant block period should be computed. e) Being dissatisfied, the assessee preferred an appeal before the learned Tribunal below and by the order impugned herein the Tribunal has affirmed the order passed by the Commissioner of Income-tax (Appeals). Being dissatisfied, the assessee has come up with the present appeal. A Division Bench of this Court at the time of admission of the appeal formulated the following substantial questions of law: “i) Whether on the facts and in the circumstances of the case when it was an admitted fact that the provisions of section 145 of the Act did not apply the Assessing Officer could come to an estimation of gross profit by adopting an arbitrary method of valuation and the said valuation could be accepted by the Tribunal when the legal position was on the contrary and, therefore the order of the Tribunal is perverse? “ii) Whether on the facts and in the circumstances of the case the Tribunal which is the highest fact founding authority could agree with the submission of the assessee that the arbitrary rate of estimation was not correct and thereafter changed its stand to the contrary for coming to a view similar to that of the assessing officer without disclosing as to why the submission of the assessee was not correct by simply observing that no evidence had been produced for which the assessee’s rate of estimation could be accepted when a case like present one it was an accepted principle that in absence of the books of accounts and documents the assessing officer could not take an arbitrary rate of valuation but had to take the net profit rate as disclosed in the return filed in pursuance of the notice issued under section 158BC of the Act and, therefore, the order of the tribunal ignoring the facts as also the law prevailing on the point was perverse?” After hearing Mr. Sen, the learned Advocate appearing on behalf of the appellant and Mr. Nizamuddin, the learned Advocate appearing on behalf of the Revenue, and after going through the materials on record, we find that although a comparative chart showing gross profit rate in the business of cement manufacturing earned by different business concerns was produced by the appellant both before the Assessing Officer and the first Appellate Authority, the Assessing Officer without any basis arrived at the conclusion that rate should be assessed at 10% without giving any reason for such estimate. It appears that the Commissioner of Income-tax (Appeals) came to the finding that there was no basis of the estimation of the Assessing Officer. Nevertheless, he himself arrived at the figure of 8.5% equally without any basis and the Tribunal below also affirmed such finding without giving any reason but merely on conjecture. In our view, when the assessee has given a comparative chart showing the rates of profit earned by various business establishment dealing with the same type of business, in order to arrive at the figure of profit on the concealed income, it was the duty of the authorities below to verify the chart given by the assessee and to ascertain whether those were genuine or not. If those were found to be genuine, the authorities below still could ascertain the veracity of the chart by examining those persons but there was no justification of fixing an arbitrary rate of 10% when other businessman doing similar business are earning at much lower rate. If those estimates are found to be frivolous or not genuine, the Assessing Officer is free to arrive at his own finding regarding the gross profit rate but that must also be arrived at based on some authentic materials. We, therefore, find that all the three authorities below arrived at the figure of gross profit rate without giving any cogent reason for discarding the chart of profit rates of different businessman doing similar type of business supplied by the assessee. As an assessing authority, it was the duty of the authorities below to consider the chart of the assessee and to examine its genuineness and for that reason, could also ask the assessee to produce evidence in support of the chart. But the finding of the rate of profit by all the authorities below were based on no evidence and thus, must be branded as perverse finding of fact. It is settled law that if a finding of fact is perverse and is based on no evidence, it can be set aside in appeal even though the appeal is permissible only on substantial question of law. The perversity of the finding itself becomes a substantial question of law (Kulwant Kaur vs. Gurdial Singh Mann, AIR 2001 SC 1273 ). We, therefore, set aside the order passed by the authorities below and send the matter back to the Assessing Officer for considering the comparative profit rate of various business organizations supplied by the appellant and to arrive at a conclusion as regards the gross profit rate after taking into consideration those materials and after giving reason in support of his conclusion. Let such assessment be made positively within two months from the date of communication of this order. We, therefore, dispose of this appeal by setting aside the order passed by the Tribunal and remanding the matter back to the Assessing Officer after answering the questions formulated by the Division Bench in the negative and against the Revenue. The appeal is thus disposed of. In the facts and circumstances, there will be, however, no order as to costs.