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TMI Blog2003 (8) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact that addition of Rs. 7,43,779 having been made by the Assessing Officer under section 68/69A of the Income-tax Act, 1961 and confirmed by the Tribunal, the CIT (Appeals) was justified in recording a finding that 'the additional income to be added to the income declared was thus arrived at Rs. 92,163 and after adding the profit and difference in purchase tax and the Bardana account, addition upheld by the ITAT, the total income as per Annexure 'A' arrived at Rs. 1,57,780', instead of Rs. 9,01,559 [addition made by the Assessing Officer under section 68/69A of the Act and confirmed by the Tribunal plus Rs. 1,57,780 as business income computed by the CIT (Appeal) him self]?" The learned Accountant Member did not agree that question No. 2 was properly worded. In his opinion, the following question reflected the difference which was necessary to be considered under section 255(4) of the Act instead of the question proposed by the learned Judicial Member:-- "Whether, on the facts and in the circumstances of the case and the directions given by the ITAT, Chandigarh Bench in its order dated 20-2-1996 in assessee's own case in I.T.A. No. 306/Chandi./91 for the assessment year 1988 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with the following observations:-- "Thus, the total addition on account of suppressed yield in respect of rice, rice bran, phak and husk etc. comes to Rs. 10,82,803. Apparently part of this profit was ploughed back in the account books of the assessee in the garb of sale proceeds of paddy, as has been discussed in para 2 (page 5) above. The addition proposed in para 2 above at Rs. 7,43,779 is, therefore, deducted from this amount of Rs. 10,82,803 and only balance amount of Rs. 3,39,024 is added back in the total income of the assessee on this account." The Assessing Officer computed the assessee's income at Rs. 12,37,042 in the computation--is as under:-- "Subject to the above discussion taxable income of the assessee is computed as under:-- Net Profit as declared: Rs. 60,320 Additions: (i) On account of bogus paddy sales as discussed in para 2 above Rs. 7,43,779 (ii) On account of low yield shown by the assessee as discussed in para 6 above Rs. 3,39,024 (iii) On account of deductions under section 80HHA and under section 80-I as discussed in para 7 above Rs. 40,210 (iv) On account of excess claim of electricity expenses as discussed in para 8 above Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alternative plea of the learned counsel of the assessee that only the resultant profit on account of milling should be added and since the matter has not been processed by the lower authorities on these lines, we restore the matter to the learned first appellate authority with the direction that he should ensure that while working out the total income of the assessee the addition of Rs. 7,43,779 is not made twice - one by way of sale of paddy shown by the assessee and second on account of sale of rice etc. on account of milling of the paddy valuing Rs. 7,43,779." [Emphasis supplied]. The learned CIT(A) took up the case in the light of directions of the Tribunal. He proceeded to compute profit from the paddy husked and associated the Assessing Officer with the calculations. After taking into account yield of rice at 66.5 per cent and other products at reasonable figure, the additional income from sale of paddy husked was taken at Rs.92,163. Total income of the assessee was computed at Rs. 1,57,781. It is obvious from the order that benefit of Rs. 7,43,779 credited on account of sale of paddy was allowed to the assessee and the said amount was not separately added. 9. The Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by milling the paddy (the paddy claimed to have been sold as it is but in fact was found to have not been sold), but the CIT(A), after having dealt with this issue, instead of stopping at the point of computation of additional business income at Rs. 92,163, exceeded in his jurisdiction vested as per the directions of the Tribunal and went on to observe that 'after adding the profit and the difference in purchase tax and the bardana account, addition upheld by the ITAT, the total income as per annexure 'A' arrived at Rs. 1,57,780. The Assessing Officer will give effect to this order, accordingly.' While doing so the CIT(A) missed to take note of the fact that (i) the Tribunal had not directed him to compute 'the total income', and (ii) the addition of Rs. 7,43,779 having been made by the Assessing Officer under section 68/69A of the Income-tax Act, 1961 (hereinafter referred to as Act) is deemed to have been confirmed by the Tribunal because of the observations in para 10 of the order to the effect. 'Thus, it is clear that the credit of Rs. 7,43,779 on account of sale of paddy in the books of account of the assessee is held to be non-genuine'. Consequently, the CIT(A) either shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the action of the CIT(A) before us, therefore, is to be seen in the light of above facts which, admittedly, are undisputed and have become final because M/s. Ganesh Rice Mills did not appeal against the order of the Tribunal on the point of confirmation of addition under section 68/69A of the Act or against the directions given to the CIT(A) while setting aside the addition on account of total sale price of rice and other by-products obtained by milling the paddy (which was claimed by the assessee to have been sold, but was never sold). 14. In view of above facts and circumstances the observation of the CIT(A) w.r.t. 'the total income' of the assessee are deleted because the total income of the assessee, after order of the Tribunal and consequent order of the CIT(A) determining the business income at Rs. 1,57,780 comes to Rs. 9,01,559 being addition under section 68/69A of the Act and having been confirmed by the Tribunal plus Rs. 1,57,780 being the business income computed by the CIT(A)." 16. At subsequent pages, the learned JM considers and rejects other contentions raised on behalf of the assessee. It is further observed that case of Bansal Rice Mills v. ITO [IT Appeal No. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the order of the Tribunal. In fact, the learned AM has emphasized the point by underlining portion of order of ITAT dated 20‑2‑1996. In other words, the Tribunal gave set off of Rs. 7,43,779 in the addition to be made for sale of rice and other products after milling of paddy shown to be sold as such in the books of the assessee. Only additional profit earned from milling of paddy was to be added. The profit from milling of paddy was rightly computed by the learned CIT(A) on the basis of earlier decisions of the Tribunal. There is no material on record to show that ITAT impliedly or otherwise sustained addition of Rs. 7,43,779 under section 68/69A of the Act. In fact, there is demonstrative evidence to show that addition of Rs. 7,43,779 sustained by the learned CIT(A) was subject-matter of appeal before the ITAT and matter was remanded to CIT(A) on this addition. In the above circumstances, there is no question of CIT(A) sustaining addition of Rs. 7,43,779 under section 68/69A of the Act. 20. There is further controversy between the learned Members that the learned CIT(A) was not empowered to determine the total income of the assessee. He exceeded his jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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