The significance of substantial questions of law in appeals and the criteria for determining substantial questions of law.

JUDGMENT :

B.N. Mahapatra, J. - This tax appeal has been filed raising several questions of law. However, at the time of hearing, learned Counsel the appellant confined his argument only to question No. 3, which reads, thus:

Whether on the facts and circumstances of the case can Tribunal come to a final conclusion regarding determination of rate of net profit on a higher side i.e., ' 7.5 per cent without assigning any reasons when two similar decisions based on similar facts have adjudicated by the same Tribunal previously vide IInd Appeal Nos. 489/Ctk/1973 dt. 11th Jan., 1980 and 293/Ctk/1991 resulting net profit ' 2 per cent and ' 7.5 per cent respectively which leads to discrimination and miscarriage of justice.

2. Bereft of unnecessary details the facts and circumstances leading to the present appeal are that the appellant is a partnership firm. It carries on business in execution of transport contract. In the year 1992-93, the appellant filed its return disclosing the net income at Rs. 1,95,120. The said return was scrutinized by the opposite party No. 6TTO (hereinafter called, "the AO"), who vide his order dt. 17th Feb., 1995 passed under Sections 143(3) and 182(1) of the IT Act, 1961 (hereinafter referred to as "IT Act") determined the net income at Rs. 3,00,120. Subsequently, by exercising powers u/s 263 of the IT Act, the CIT-opposite party No. 3, vide his order dt. 27th March, 1997 set aside the order of assessment with certain directions to the AO to pass fresh assessment order on the ground that the assessment order was erroneous and prejudicial to the interest of the Revenue. Pursuant to the said order of the CIT opposite-party No. 3, the Deputy Commissioner of Income Tax, Berhampur Circle, Berhampur-respondent No. 5 (hereinafter referred to as the "Dy. CIT") scrutinized the accounts of the appellant. The Dy. CIT vide his order dt. 25th March, 1999 after scrutinizing all the accounts inter alia came to the conclusion that the cash books maintained by the assessee were devoid of any authenticity and rejected the books of account maintained by the assessee holding that the same could not be relied upon. Invoking the provisions of Section 145(2) of the IT Act, the Dy. CIT estimated the net profit at the rate of 12 per cent of the gross contract receipt before depreciation and determined the profit from transport contract business at Rs. 13,07,754. The Dy. CIT also made addition of Rs. 3,00,000 u/s 68 of the IT Act. Being aggrieved by the said order of the Dy. CIT, the appellant filed first appeal before the CIT(A)-1-opposite party No. 4 who vide his order dt. 21st Dec, 1999 passed in ITA No. 99/Ori./1999-2000 allowed the appeal in part estimating the net income from the transport business at Rs. 2.5 lakhs with further direction to the AO to pass fresh order after affording reasonable opportunity to the partners to establish their genuineness and worthiness for investment. Being aggrieved by the order of the first appellate authority, Dy. CIT-opposite party No. 5 filed appeal before the Tribunal, Cuttack Bench, Cuttack, bearing ITA No. 59/Ctk/2000. The assessee also filed cross-objection bearing CO. No. 10/Ctk/2000. Learned Tribunal vide its order dt. 26th Aug., 2002 allowed the appeal filed by the Revenue in part and dismissed the cross-objection of the assessee holding inter alia 7.5 per cent profit is reasonable in the case of the appellant in transport contract business. It relied upon an earlier order passed by it in ITA No. 293/Ctk/1991 as against the net profit shown by the assessee at 5 per cent. However, learned Tribunal upheld the order of the CIT(A) on the point of addition of Rs. 3 lakhs out of the capital introduced by the partners. Hence, the present appeal.

3. Mr J.M. Pattanaik, learned Counsel for the appellant submits that when the first appellate authority relying on an earlier order of the learned Tribunal has estimated the net profit ' 2 per cent of the gross contract receipt, learned Tribunal is not j