TMI Blog1981 (9) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dt. 7th Nov, 1980 the Agrl. ITO observed: The income which has been left without tax as it has been realised in excess than the estimation as shown in Annexure I to V is assessed to tax for the asst. Yr. 1974-75 corresponding to according year 1973-74 as escaped income under s. 19-A read with s. 35 of the Tamil Nadu Agrl. IT Act, 1955, and the assessment is finalised as under: Annexure IV Vasambadi Estate 1974-75 Asst. yr. ___ Revised statement Season Opening stock Season Realisation 1972-73 7,09,939.00 1971-72 4,499.00 . 1972-73 7,83,472.00 . 1973-74 8,02,185.00 Gross Income 8,80,220.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of the asst. yr. 1975-76 (Vasambadi Estate) the Agrl. ITO made assessment under Ref: GIR. 32 V/75-76/YCD dt. 5th May, 1977. Similarly for the year 1976-77 the Agrl. ITO passed an order under Ref: GIR 32-V/76-77/YCD dt. 5th May, 1977 and for the asst. yr. 1977-78, the Agrl. ITO made an assessment under Ref. GIR. 32 V/YCD/1977/78 dt. 15th May, 1978. It is pointed out that in all these years, the unrealised income of the earlier years of the estate have been considered and hence there was no question of taking the same income for the year 1974-75. The 1d. State Rep. supported the order of the lower authorities. He submitted that the estate has been assessed as 'tenants-in-common' only in subsequent years which is not permissible under law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n into account in computing the agricultural income according to the method of accounting then employed by the assessee. 4. If these prerequisites are established then reassessment of such person for the said previous year after taking into account the correct value of closing stock is permitted." 13. A perusal of the order of Agrl. ITO indicates that the crucial facts are missing. As the year in which compounding was permitted for asst. yr. 1975-76, action under s. 19A is permissible only in respect of closing stock which escaped assessment for the asst. yr. 1974-75 only. There is no finding in the order how such a closing stock was omitted to be assessed. There is no discussion as to the method of accounting then employed. Nor is ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing that is relevant, in the case of assessee maintaining their accounts on the mercantile system is the sales of coffee effected by them during the previous year relevant to the assessment year, and in the case of those maintaining accounts on the cash system, the price realised by the them in the relevant previous year. In both the cases the question of opening stock and closing stock is irrelevant. If we apply this principle to this case where it is said to be mercantile system of accounting the proceeds of coffee will be taxed in the year of sale whenever realised. The proceeds of 1973-74 season are alone relevant for asst. yr. 1974-75. There is no specific finding that the closing stock of coffee of this assessee in 1973-74 crop was o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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