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Golden Tobacco (GTC), a Dalmia Group firm, has said that it has won a Rs 33 crore tax dispute at the Income Tax Appellate Tribunal which threw out the petition of the department.
The tribunal termed the Rs 33-crore tax estimate made by the income tax assessment officer for three years from 1984 to 1987, as "far-fetched and implausible" assumptions and quashed the same.
In a March 7 order, the tribunal said the estimation made by the department for assessing the income is very faulty, because it is based on high degree of presumption and hypothesis.
"We are unable to uphold the kind of estimation or addition that has been made by the assessing officer and sustained by the income tax commissioner and accordingly, we direct the assessment officer to delete the entire addition. In the result assessee's appeal is allowed," the tribunal said in the order.
The tribunal also observed that the department had speculated that on each and every sale of lower brand cigarette to millions of consumers through millions of retailers, the company made extra profits equivalent to the price of higher priced cigarettes.
"Such a wild speculation or basis for estimation on the facts of the present case is very farfetched and implausible. The best judgment does not entail wild guess or huge additions, albeit it lays down determination of income based on fair and reasonable analysis based on some tangible material," the order said.
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