TMI Blog2003 (7) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... from M/s Vikas Ginning Factory. Therefore, according to the AO the balance of 106.82 quintals should have been found in the closing stock. But on verification, it was found that the balance was not shown in the closing stock. The assessee explained that the aforesaid 146.82 quintals of Kapas were purchased between 4th Feb., 1993, and 31st March, 1993, which includes the 100.39 quintals of Kapas purchased from one M/s Paras Co. Bijapur, under a sale bill dt. 24th March, 1993. The explanations offered by the assessee were not accepted by the AO. Accordingly he made the addition of Rs. 1,10,946 towards the sale out of the books of account. The learned CIT(A) while agreeing with the action taken by the AO, made an addition of Rs. 15,191 obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nned and the billing was made on 24th March, 1993. There is no sale out of books. Besides that the learned counsel for the assessee also filed its written submission wherein it has been stated that the assessee-firm accounted for all the sales transactions, purchases transactions in the books of accounts. The assessee-firm has not concealed any sales or purchases of Kapas/cotton/cotton seeds. The ITO arrived on the concealed sales of Kapas of 100.86 quintals valued at Rs. 1,10,946 on the basis of preparing yield statement and on the basis of dates of purchases of Kapas and ginned cotton. It is practice in the business of cotton that the deliveries were given of Kapas on delivery challan earlier and final bill is prepared subsequently after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lued at Rs. 94,170. The ITO adopted the rate of Rs. 1,100 per quintal and made addition of Rs. 1,10,946. Rate adopted for Kapas by the ITO is wrong. The learned CIT(A) enhanced the addition to Rs. 1,17,502 by adopting the same rate as valued by the ITO calculating the difference of stock of 100.86 quintals instead of 100.39 quintals. The act of the learned CIT(A) is also wrong without any proof on record. He relied on the yield statement as found in his written submission and submitted that the yield statement as per accounts shows shortages at 1.85 per cent in Kapas. Standard shortages as per Cotton Corporation of India (CCI) is allowed and considered upto 2 per cent Accordingly the yield statement as per accounts proves that the additions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade on 24th March, 1993. But it is the case of the assessee that the delivery was taken at an early date and the same was ginned even before the date of purchase bill made on 24th March, 1993. The AO had verified this statement from the seller of the Kapas. The question No. 6 and its answer are very relevant to find out whether the assessee had taken delivery at an early date either on 15th March, 1993, or before that. The question answer is extracted hereunder. "Question: When actually goods mentioned in the bill No. 155, 24th March, 1993, delivered. Any acknowledgement has been obtained? Answer: The auction was awarded to M/s Sayar Co. on 24th March, 1993, by the APMC, Bijapur. The billing was made on the same date and the delivery ..... X X X X Extracts X X X X X X X X Extracts X X X X
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