TMI Blog2019 (8) TMI 1275X X X X Extracts X X X X X X X X Extracts X X X X ..... business of potato - assessee is ruining a cold storage - allegation for violation of the provisions of U.P. Regulation of Cold Storage Act - HELD THAT:- Tribunal has also recorded a categorical finding that no evidence of purchase, sales or unaccounted stock belonging to the assessee during the course of search or survey was found or established, thus, there was no justification for the authorities to make or confirm the addition of the said amount. There is no doubt that the business of running a cold storage is governed by the U.P. Act of 1976 and it is only after the grant of licence by the licencing authority that a cold storage can run according to the terms and conditions of the licence. Any violation of the terms of licence has penal consequences as provided under Section 37 and 38 of the Act, for which the Magistrate of Ist Class is empowered to take cognizance of any offence so made by the licence holder. As, in the case in hand, during the search and survey in the business premises of the assessee, no such violation was found or recorded, nor any notice was given or action was taken against the asssessee, as is evident from the perusal of the documents before us. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case in directing the A.O. to re-decide the issue by considering the books of accounts produced by the assessee, ignoring the provision of Section 142A. 3. Thereafter two additional substantial questions of law were added which are as under:- 1. Whether the ITAT is legally justified in reversing the concurrent finding of fact of the authorities below without appreciating the material on record ? 2. Whether the ITAT is legally justified in reversing the concurrent findings of fact of the authorities below in the balance of fresh material placed before it ? 4. Respondent-assessee is a partnership firm engaged in cold storage business having its Head Office at Sahson, Allahabad. The dispute relates to the assessment year 2008- 09. It appears that action under Section 132(1) of the Act was taken in group cases of Kesarwani Zarda Bhandar, Allahabad and its partners on 27.8.2009. 5. The Assessing Officer framed assessment under Section 153-A of the Act on 28.12.2011 for the assessment year in question. The order of the AO was challenged before the Commissioner Income Tax (Appeals). The major cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 68 of the Act, which was not applicable in the case, and subsequently in appeal, the Commissioner of Income Tax (Appeals) held that the provisions of Section 69A were applicable, which according to him, the First Appellate Authority did not have the power to change the law to sustain the addition. 9. He further submitted that the assessee firm is not engaged in the business of potatoes and the assessee is running a cold storage and the business is of storing potatoes for which rent is realised from the farmers who store agricultural produce in the Cold storage. 10. The assessee maintains complete record as far as the storage of potatoes is done and the assessee maintains the storage (bhandaran) and delivery (nikasan) register and issues rent receipt for the period for which potatoes are stored. 11. Sri Ravi Kant, learned Senior Counsel further placed on record the U.P. Regulation of Cold Storage Act, 1976, which regulates the functioning of the Cold storage in the State of Uttar Pradesh. 12. Section 2 (c) defines the cold storage , means an enclosed chamber insulated and mechanically cooled by refrigeration machi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present case, no violation has been noticed or has been brought on record by the Assessing Officer meaning thereby that the assessee did not violate any of the terms of provisions of U.P. Regulation of Cold Storage Act, 1976. He further submitted that the addition is made merely on presumption and no material or evidence has been brought on record to prove that assessee is engaged in the business of potatoes. As in a cold storage potatoes can only be stored and it cannot be used for any other purposes. It was also submitted that the case of the assessee is only of bailee and the transaction between the assessee and the constituents are the bailment i.e. the storage of potatoes and later on delivery. 17. We have heard learned Counsel for the parties and perused the material on record. 18. It is not in dispute that the assessee is running of a cold storage, after being granted the licence as mandated under the U.P. Regulation of Cold Storage Act, 1976. Under the said Act, it is only the storage of the agricultural commodity for which the licence is granted and no other business can be carried out by the licensee. The Act and the rules lay down the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... U.P. Regulation of Cold Storage Act. Once it is established that the assessee did not violate any terms of provisions of U.P. Regulation of Cold Storage Act, 1976, then, the finding recorded by by AO as well as the first appellate authority that the assessee was in the business of potatoes and the addition so made by the Assessing Officer was merely on the basis of presumption and assumption and without any material on record. 23. The Tribunal has also recorded a categorical finding that no evidence of purchase, sales or unaccounted stock belonging to the assessee during the course of search or survey was found or established, thus, there was no justification for the authorities to make or confirm the addition of the said amount. There is no doubt that the business of running a cold storage is governed by the U.P. Act of 1976 and it is only after the grant of licence by the licencing authority that a cold storage can run according to the terms and conditions of the licence. Any violation of the terms of licence has penal consequences as provided under Section 37 and 38 of the Act, for which the Magistrate of Ist Class is empowered to take cognizance of any offence ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
