TMI Blog2008 (12) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of undisclosed sales of potato left by the stores by adopting the rate of potato at the rate Rs. 45.65 per quintal though other assessees of the same trade like M/s. Shri Mahavir Cold Storages, M/s. Shyam Cold Storage have shown the sale of potatoes in the same period at the rate Rs. 140 to 160 per quintal. (3) The order of the Ld. Commissioner of Income-tax (A) being erroneous in law and on facts, be set aside that of the Assessing Officer be restored." 3. The following grounds have been raised by the assessee:- "(1) The learned Commissioner (Appeals) has erred in confirming the addition to the extent of Rs. 2,86,283 after taking this amount as difference of surrendered income of Rs. 15,00,000 and Rs. 12,13,717 (Rs. 9, 13,317 short, realisation in cold storage rent after the Survey + Rs. 3,00,000 surrendered by the appellant as income over and above the income as per profit and loss account Rs. 2,24,921). (2) The learned Commissioner (Appeals) has erred in rejecting the appellant's contention that returned income of Rs. 5,24,921 takes care of the aforesaid shortage of Rs. 2,86,283. (3) The learned Commissioner (Appeals) has erred in holding that surrendered income is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as observed that assessee has not shown income from sale of potatoes left by the storers though the partner of the firm admitted in his statement recorded on oath on 7-12-2000 at page 11 that potatoes left by the storers were purchased by the firm. The statement of one storer Shri Ram Singh who was present in the business premises of the firm at the time of survey was also recorded and was seen and signed by the partner Shri Pradeep Kumar. Shri Ram Singh stated in his statement that he has sold his potatoes stored in the cold storage to the assessee's firm at the rate of Rs. 30 and Rs. 20 per packet. He has also stated that other storers also have sold their potatoes to the firm. Undisclosed sale of the potatoes has also been admitted by the assessee in his statement as in furtherance of that he has made disclosure of income in his statement. The assessee was asked to explain vide order sheet entries dated 17-2-2004 about the purchase and sale of potatoes left over by the storers. The assessee filed his reply dated 3-3-2004 stated that he has shown the purchase and sale of the potatoes and expenses incurred thereon. I have perused the reply dated 3-3-2004 and copy of accounts e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Palledars of cold storages as declared at page 3 of the statements." This also finds confirmation from the order sheet noting dated 32004 wherein the assessee expressed his inability to either identify or produced the buyers to whom the last left over potatoes were sold at thrown-away price. Total bags of potatoes shown sold 20138 Weight in Kg. @ 65 Kg. per bag 20138 X 65 Kg. = 13,08,070 Weight in quintals 13090 Quintals Total receipts from the sale 13090 X 138.5 = 18,12,965 @ Rs. 138.5 Less: Expenses as shown 18,479 --------- 17,94,486 Less: Sale disclosed as remain 6,17,275 --------- Undisclosed sale 11,77,211 --------- Thus, undisclosed sale of potatoes and rent realised therefrom worked out at Rs. 1177211 and as has not been disclosed by the assessee, the same is added in the total income of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), Indore. The said copy which had been supplied to the assessee it was submitted was enclosed by the assessee before the CIT(A). On the basis of this, it was submitted that the statement of Suresh Kumar, Proprietor of M/s. Maa Aloo Bhandar, Indore which was available would show that in the financial year 2000-01 the sale rate of potato was too low and the sale proceeds of 1 quintal potato were less than Rs. 80 which is the cold storage of 100 potatoes. Thus on account of this fact the storers were not taking delivery of the potato stored by them. It was submitted that the statement of Suresh Kumar would show that the sale rate of 1 kg. of potato at Indore was Rs. 125. This was after paying truck rate to and fro from Indore and commission expenses etc. and thus the net average sale rate after deducting these costs would come to Rs. 40 per quintal. 8. The assessee also enclosed News Paper cutting for the relevant period namely around the first week of December wherein the sale price to stores had been mentioned at Rs. 30 to Rs. 40 per quintal. 9. The reference made to the names of Shyam Cold Storage and M/s. Shree Mahaveer Cold Storage, Farrukhabad for the sale rate of potato wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of this sale bill as per page No. 53 of the paper book. Thus as per Assessing Officer, sale rate per quintal comes to Rs. 134.50 (Rs. 20,665.00/154). In this sale bill net sale proceeds are Rs. 7046 only after deducting various expenses amounting to Rs. 13,619 by the Commission Agent in the Beejak itself. Thus the correct sale price per quintal will be Rs. 7046.00/154.35 = Rs. 45.64. In view of the facts and figures mentioned, above, the addition of Rs. 11,77,211 by applying a sale rate of Rs. 138.50 per quintal is incorrect. Therefore, the addition of Rs. 11,77,211 on account of undisclosed sale of potatoes left by the storers does not survive and is hereby deleted. The left over potatoes by the storers of 20,138 bags were sold between 23-11-2000 to 17-2-2001 is verifiable from the copy of potato sale account. From 23-11-2000 to 7-12-2000 out of the left over potatoes, the appellant sold 5900 bags. In this account sale of potatoes are by cash as well as by drafts. The Assessing Officer understood that 20,138 bags were sold up to 72000 which was the date of survey. Thus, the Assessing Officer's observation that how 20,138 bags of left over potato could be sold when stock found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he register was 28334 bags on 21-11-2000 and the partner Mr. Pradeep Kumar as per the statement recorded at the time of survey in response to question No. 23 translated version of which is placed at page 107 and the original copy of which is placed at page 15 of the Paper Book submitted that the discrepancy of 11274 was on account of incomplete posting in loading and unloading register. It was submitted that this fact of incomplete posting has been pointed out by the Assessing Officer himself and this fact has not been disputed by the assessee and has been admitted by the assessee also. It has also been taken into consideration by the CIT(A). The difference it was submitted was explained in the assessment proceedings by the assessee in the following manner:- "Potato Bags No. of Bags stored 97,313 Rent received 74,404 ------ 22,909 Bags left by storer which were sold to recover rent on account of unprecedented conditions existing during the year 20,137 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13,090 X Rs. 138.50 per Qty. = 18,12,965 17,94,486 As per assessee Rs. 47.15 per Qtl. = 6,25,204 6,17,275 ---------- Addition 11,77,211" ---------- 19. On the basis of the above, referring to written synopsis, it was argued that the Assessing Officer has no evidence or basis for applying the rate of Rs. 138.50 per quintal. The details of the sales made were filed in the assessment proceedings. No discrepancy it was argued has been pointed out nor has it been referred in the course of the survey by the department. It was also submitted that draft of Rs. 7,046 was found in the premises of the assessee which was in respect of sale proceeds of the potatoes left by the farmers which was sold to M/s. Maa Aloo Bhandar, Indore. These facts were explained to the survey team vide answer No. 17 and also relying upon the sale bills, copies of which are placed at pages 52 to 53 of the Paper Book which fact it was submitted was substantiated that the sale rate came to Rs. 45.64 per quintal. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been taken out by the Cold Storage Association putting the persons who has stored their potatoes to notice of the fact that the storers of potatoes in the concerns named therein that in view of the drop in prices the storers of the potatoes should take their potatoes after making the payment upto 31-10-2000 as thereafter the cold storage would be under a compulsion to sell the potatoes in the market and only after the recovery of the outstanding rentals the farmers/storers would be paid left over if any. A perusal of the same shows that the assessee's name is found mentioned in the said notice at Sl. No. 5. Thus it is seen that public notice has been given by the assessee through the Association and as per the material available on record even the survey party found certain blank notices which the assessee claimed it had issued individually also to the various storers. Similarly a perusal of the Paper Book page 87 would show Newspaper report in the daily Dainik Jagran dated 22000. The translation of the title would read something like "Due to drop in the prices of new potatoes old potatoes have lost its value". Similarly, a perusal of page 88 of the Paper Book would show another ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On receipt of draft the Cold Storage owner deduct the expenses like rent, advances given to the storers, if any, interest on advances, Bardana etc., from the sale proceeds and balance amount given thereafter to the assessee after getting the sign of the storers on the "Beejak". The assessee was asked to produce the Beejak vide the order sheets entry dated 17-2-2004. The assessee failed to produce the "Beejak" on which it is alleged that account of the storers are calculated on the Beejak and balance amount got received thereon from the storers. It is also evident that at the time of survey four drafts were found along with covering letter dated 5-12-2000 which is addressed to the Ratan Cold Storage. This covering letter showed the Bill No. 3086, 3047, 3071, 3083 showing payment against sale of potatoes and issued by Maa Aloo Bhandar, Indore. The first three bills are in the name of Seth Shyam Mohan Dubey C/o. Ratan Cold Storage and bill number 3083 is in the name of Ratan Cold Storage. On being asked about these bills, assessee replied that it belongs to Shri Shyam Mohan Dubey. Shri Shyam Mohan Dubey summoned and his statement was recorded on oath. In his statement he stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce at the site was found to suggest that specific owners of the said shortage were identifiable. Farmers who had given their specific consent for the sake of their potatoes by the cold storage owner. Accordingly, it only leads to the conclusion that the assessee dealt in "Own Trading". This further borne out by the statement of Shri Shyam Mohan Dubey and truck drivers - Raju Savita and Kanhaiya Lal recorded at the time of survey. Thus, shortage of stocks detected and the potatoes loaded through trucks for transportation and sale thereof has evidently belonged to the assessee. The undisclosed sale is estimated at 25000 bags on which net receipt is worked out as under:- Total undisclosed bags sold 25000 bags Weight of potatoes of 25000 bags 25000 X 65 Kg. = 1625000 Kg. Weight in Quintals 16,250 Qtls. Receipts @ Rs. 140 Rs. 16250 X Rs. 140.00 = Rs. 22,75,000 Purchase price of potato @ Rs. 40 Rs. 16250 X 40 = Rs. 6,50,000 Thus, higher of the two i.e., 2275000 is undisclosed investment and profit thereon which is added to the total income of the assessee." 22. Aggrieved by this, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moning some of the farmers. 25. It was also pointed out that when the potato is taken out for sale the same is unloaded from the cold storage in the veranda. The bags are opened and the potatoes are spread out for cleaning and separating the damaged potatoes from the good ones. After separating the good potatoes they are refilled and repacked in the old Bardana and it was these loose potatoes which were being sorted out which had been noted by the survey party as being found spread out in the veranda. It was submitted that the trucks are arranged by the cold storage owner for their storers as the storers may not know the truck owners and the truck owners would necessarily not recognize the storers and would only recognize the cold storage owner who made the arrangement on behalf of the storers. It was submitted that due to this reason the truck owners would generally refer to the name of the cold storage. This fact it was submitted does not indicate that the potatoes transported by them actually belonged to the cold storage owner. 26. It was also submitted that in the year under consideration the potato of some storer was purchased by the assessee which is evident from the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proved from the loading and unloading register. It was also his submission that the alleged storer has admittedly stated he had no agricultural land and that his brother Shri Ram Saran had worked as a Palledar at some point of time and although his name appear as storer, however, he has not stored any potato in the cold storage. It was also his submission that original slip in the gate pass book No. 17-11 in most of these the signatures of the alleged storer is not there and the signature of the person different from the one whose name appears on the receipt. Accordingly it was his contention that the assessee exercised significant discretion in control management over the stored potatoes regardless of the consent of the alleged storer. Accordingly, it was his contention that the system of unloading sale and receipt of consideration is entirely a discretion of the management and the assessee whose partner aware of this accepts that aloo has been stored by the storage and admits that profit on the same will be disclosed. It was also his submission that apart from owning the draft of Shyam Mohan Dubey the draft in the name of Amar Singh were also accepted. The assessee as per his ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t required. The appellant stated to have maintained potato rent register in which rent received from storers have been credited and there are no rent receipts against the name of storers who have left their potatoes without paying the rent. It was also argued that the cold storage rent receipts were checked by the Assessing Officer from this register. It was further argued that one DO book 17.11 was checked by the survey team in which all the 3 copies of Gate Passes were in tact: As per answer to question No. 28 of the statement on oath of Shri Pradeep Kumar, this book was used by the appellant for selling potatoes left by the storers thus all the three copies were in tact. This answer by Shri Pradeep Kumar, partner, also confirms that storers left their potatoes without paying cold storage rent. In DO book No. 18.1, there were 11 Gate Passes which were left to be entered in unloading register in which 231 bags are noted. At the time of survey, delivery order book for rent receipts were available while cash book was not available thus cash balance remained unchecked. The Assessing Officer has accepted the position of 2772 bags of rotten potato in the assessment order. As regards th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capacity of the 3 chambers was already overstretched and the assessee had also explained its modus operandi that after unloading the bags stored in the cold storage stored out in the veranda and the good aloo is separated from the bad aloo and this fact was seen, by the survey team also and has been consistently argued by the assessee. It was also his submission that in regard to whatever register the Department would like to refer to state that there was certain entries which were not meant to be recorded. The fact on record is that the assessee did make a surrender of Rs. 3 lakhs in the return itself as such this would cover the limited own trading done on credit by the assessee on account of its personal interaction with certain storer who may need fund to tide over certain difficult situation in their life and the assessee has accepted these facts and has disclosed the receipts therefrom. However, it was submitted there is no evidence placed on record to show that the capacity of the 3 chambers of the cold storage of the assessee was over and above what has consistently been argued by the assessee. It was his submission that detailed arguments had been advanced before the CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the date of survey. However, the facts taken into consideration by the CIT(A) which had been canvassed before the Assessing Officer, CIT(A) and also before the Bench would demonstrate that each and every fact and argument has been met by the assessee by way of documentary evidences and cogent explanations etc. namely the factum of incomplete recording in the loading and unloading register has been accepted by the assessee itself and reconciliation thereon has been done. Further the factum of existence of gate pass book without signature of the storer is also accepted so as to explain that for dispatching the potatoes stored by the storer the assessee was ready to off-load the same from the cold storage in regard to which notice had also been given in the local Newspaper through the Association to the storers as and when they presented themselves and settles their dues, documentary evidences by way of Newspaper reports for the contemporary period has also been placed on record before the authorities below which has been taken into consideration by the CIT(A) so as to demonstrate that due to flooding in the market by new crop of potatoes the prices fell drastically so as to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the rate of 80 per quintal the same was being sold in the market at a much lower price, as such, it was not a viable option. Accordingly, in view of the above, we find no good reason to interfere with the finding arrived at in para 6 of the impugned order which is a reasoned decision taken on the basis of facts available on record to hold that the storage capacity of the cold storage was not what has been estimated by the Assessing Officer as the basis resorted to by the Assessing Officer was based on presumptions and conjectures and not on any evidence. 33. The availability of loose potatoes in the veranda has also been adequately explained as observed the rate at which the potato bags were sold at the relevant point of time has also been considered in para 5 of the impugned order which has not been assailed by any documentary evidence, whereas the evidence in respect of sale of potatoes in regard to the peculiar facts and circumstances of the relevant time have been taken into consideration by the CIT(A). The alleged difference in regard to shortage of stock of 11274 bags stood reconciled on account of non-posting of loading/unloading register. Similarly the factum of non-p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of special survey under section 133A of the Income-tax Act, 1961 purely on estimate basis on 7-12-2000 Rs. 15,00,000 (2) Total storage of potato 97313 bags or 82036 quintals expected potato storage rent (gross). Rs. 65,62,907 (3) Due to poor sale rates of potato of 18949 quintals/22,909 bags when left by the storers without paying cold storage rent. Out of this, 20138 bags potato were sold for Rs. 6,17,275 (against possible rent Rs. 15,15,920). Thus Short realisation in rent than expectation. Rs. 8,98,615 (4) Subsidy given in rent which also resulted in short rent Rs. 15,072 Total short in rent (3+4) Rs. 9,13,717 Income returned including surrendered amount of Rs. 3,00,000 Rs. 5,24,921 As per the above computation, after the date of survey, the income of the appellant went down by Rs. 8,98,645 on account of poor sale rates of potato of 18,949 quintals contained in 22,909 bags which were left by the storers without paying cold storage rent. As stated above, the appellant has give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... canvassed that the only occasion where assessee's statement can be used as an evidence against him is the statement recorded under section 132(4) during the course of the search and seizure operations by virtue of specifically legal positions to this effect in the said section. Accordingly, the surrender made under section 133A is not binding. The alternative argument it was also submitted that the assessee had filed return of income of Rs. 5,24,921 and if the surrender of Rs. 3 lakhs is reduced the same is Rs. 2,24,921. The addition at least to this extent should not be made again. 36. Learned D.R. on the other hand relying upon the Assessment Order contended that the issue has not been considered by the CIT(A) appropriately while granting relief. As such, since the assessee has itself admitted own trading etc., on account of surrender of Rs. 3 lakhs odd was made, there is no reason or basis why the entire surrender of Rs. 15 lakhs made by the assessee should not be confirmed. 37. We have heard the rival submissions and perused the material available on record. On a careful consideration of the same, in the peculiar facts and circumstances of the case, we are of the view that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the business carried by him were found. The loading and unloading register was not complete. It had been written only upto 21-11-2000. Huge difference in physical inventory of stock was also found with the stock worked out during the course of survey. No delivery orders evidencing storage of goods made for outsiders were found. The transportation by the trucks were found to have been done in assessee's name. The assessee also was found to have purchased the goods from some of the storers from whom it had earned rental income/hire charges. The assessee also admitted that some of the stocks stored by its clients were not lifted. The same were, admittedly, traded by the assessee himself. The survey party also took statements from various persons namely Raju Savita, Kanhaiya Lal and Ram Singh which revealed earning of income by the assessee outside the books. Bank drafts were also found, but the assessee was not able to give exact source (sic) thereof except stating that these 6 per cent of the sale proceeds of potatoes were left by the farmers. When the assessee was confronted with all these materials, his partner Shri Pradeep Kumar, having 50 per cent share in the profit and loss o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age, held that the addition of Rs. 22,75,000 so made, is not on proper grounds and the same, therefore, stood deleted. As regards the discrepancy and concealment of income and profits pointed out by the Assessing Officer on the basis of which several additions are stated to have been made, she held that these remain unsupported and the same were also deleted accordingly. 5. The ld. CIT (Appeals) vide paras 7 and 8 of its order dealing with the surrender of an amount of Rs. 15,00,000 made by the assessee at the time of survey, sustained the addition of Rs. 2,86,283 only by taking the reasoning as under:- "As regards the statement of Shri Suresh Khubani, it was stated that at the time of survey there was no declared income as the business was running and profit or loss cannot be worked out without finalizing accounts. In these circumstances the appellant declared a sum of Rs. 15,00,000 as income of firm M/s. Ratan Cold Storage which includes income of cold storage rent from storage of potato (income of rent from storage of potato is the main income of the cold storage business) and other items but due to leaving potato by the storers without paying cold storage rent the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmed so as to take care of the surrender made by the appellant at the time of survey under section 133A of the Income-tax Act. Since the discrepancy and concealment of income and profits pointed out by the Assessing Officer on the basis of which several additions were made by the Assessing Officer as per the assessment order remained unsupported and the very basis of addition which was based upon the capacity of the cold storage did not survive, the other additions made by the Assessing Officer are deleted hereby. 8. Thus out of the total addition made by the Assessing Officer at Rs. 37,77,211 (Rs. 11,77,211 + Rs. 22,75,000), addition to the extent of Rs. 2,86,283 is confirmed and the balance Rs. 34,90,928 is deleted." 6. Having heard the parties and after careful perusal of the material on record with reference to the precedents cited at Bar, I find that under the peculiar facts of this case, the Assessing Officer had found that the accounts of the assessee are not complete and correct and as such, are not reliable. The same, therefore, stood rejected by application of section 145 of the Act. The ld. CIT (Appeals), however, sustained part addition to the extent of Rs. 2,86, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capacity of its cold storage at 90,000 bags only. The assessee thus is found to have stored 7,313 bags in excess of the admitted capacity of 90,000 bags. The plea of the assessee that it could not store more than the storage capacity of 90,000 bags thus stands belied. The ld. CIT (Appeals), therefore, could not have deleted the entire addition of own trading estimated at 25000 bags on the premise that addition on the basis of the capacity of the cold storage did not survive. The Assessing Officer, on the other hand, after rejecting the accounts is found to have acted in accordance with the powers vested in him under law. His action to estimate income is also found justified. In making assessment in the manner provided under section 144 of the Act, the Assessing Officer, however, has to make what he honestly believes to be a fair estimate by way of honest guesswork. This principle is found laid by Privy Council in the case of CIT v. Laxminarain Badridas [1937] 5 ITR 170. The estimation of income by taking own trading of 25,000 bags in the present case, appears to be excessive. The over utilization of capacity at a particular time was by 7313 bags only as on the date of survey on 7-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial on record and also the fact that the accounts of the assessee stood rejected by application of provisions of section 145 of the Act, the Assessing Officer was legally justified to have estimated the income from sale of potatoes left by the farmers. The ld. CIT (Appeals) without ascribing any good reasons deleted the entire addition. This action of the ld. CIT (Appeals) is neither factually nor legally correct. After due consideration of the assessee's explanation before the authorities below and the relevant material that has been considered by the ld. Assessing Officer, and keeping in mind the principle laid in the case of Laxmi Narain Badridas, it would be fair and reasonable to estimate income from sale of potatoes left by farmers at Rs. 8,50,000 only as against Rs. 11,77,211 made by the Assessing Officer. The total additions, thus sustained on account of income from own trading, unexplained investment in Bardana and sale of potatoes left by farmers would equal to the amount of surrender of Rs. 15,00,000 made by the assessee's major partner having 50 per cent share in profits and gains of business at the time of survey. The ld. CIT (Appeals) herself is found to have accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t considering that there is a short recovery of rent by the assessee from storage of goods left with the assessee. Another reason is that when income is estimated, as in the present case in appeal. it is presumed to have taken into account all expenses and deductions. The legal error committed is that in case of deemed income, no deduction of expenses as such is allowable because such deemed income does not fall under the head income from profits and gains of business or profession. A view on this is available from the judgment rendered by Hon'ble Gujarat High Court in the case of Fakir Mohmed Haji Hasan v. CIT [2001] 247 ITR 290. The ld. CIT (Appeals) sustained the addition of Rs. 2,86,283 only over and above the income of Rs. 3,00,000 surrendered in the return of income. I, therefore, modifying her order, direct a further addition of Rs. 9,13,717 which will equal the additions finally sustained on account of estimated, sales of potatoes as own trading, unexplained investment in Bardana and sale of potatoes left by farmers for the reasons given hereinbefore. As a result of this, assessee's ground in appeal stands rejected and revenues grounds stand partly allowed. 12. In the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her from the reading of both the orders and the voluminous paper book filed by both the parties, are that the assessee is engaged in the business of running a cold storage plant. There was a survey action on 7-2-2000. During the survey, statement of one partner having 50 per cent share in the assessee-firm was recorded on oath. On the basis of various discrepancies pointed out by the Survey Team, the assessee agreed to surrender a sum of Rs. 15,00,000 to cover up the discrepancies. The assessee has disclosed rental income and income from sale of potatoes taken from the farmers were involved. The assessee, in fact, runs a cold storage for the benefit of getting a better price for the farmers. The assessee has accepted the potatoes for such cold storage facilities. The potatoes were taken from the farmers. It so happened in the previous year relevant to the assessment year in question that there was a steep fall in the potato price and it was explained that after adding storage charges payable to the assessee, the price of the potatoes are required to be sold at Rs. 138.50 and the farmers did not take the delivery of potatoes forcing the assessee to sell those potatoes and realize th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... huge additions in the case of the assessee. In paragraph 20 of the order of the learned JM, she has discussed various newspaper reports and also gone through the prevailing market conditions very carefully in coming to the correct conclusion as regards the addition to be sustained in the hands of the assessee. The prevailing market conditions have not at all been properly appreciated in the order of the learned AM. I entirely agree with the reasoning given by the learned JM in upholding the dismissal of the revenue's appeal on both the issues raised in the revenue's appeal. The matter will now go before the Division Bench. ORDER Per Sanjay Arora, Accountant Member.-In this case, there was a difference of opinion between the Members constituting the original Bench. The ld. Judicial Member proposing the order for the Bench dismissed the appeal of both the assessee and the revenue. The ld. Accountant Member, on the other hand, proposed to write a separate order and while agreeing with the ld. Judicial Member in the dismissal of the assessee's appeal, allowed the revenue's appeal. The ld. Third Member, vide his order under section 255(4) of the Income-tax Act, 1961 dated 23-12-2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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