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TMI Blog2012 (11) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... f account as maintained by the appellant assessee invoking the provisions of section 145(3) of The Income Tax, 1961. 2. That the Ld. CIT(A), the 1st appellate authority has erred in upholding the addition of Rs. 10,68,860/- made by the Ld. AO, not appreciating the facts and circumstances of the case placed before him. 3. That the order passed by the Ld. CIT(A) u/s 250(6) of The Income Tax Act, 1961dismissing the appeal of the assessee is against the true facts & circumstances of the case in as much as, is bad in law. 4. That the appellant craves for permission to add, delete or amend the grounds of appeal before or at the time of hearing of appeal." 3. In Ground No.1, the assessee contended that CIT(A) erred in holding that the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tstanding balance shown against the appellant as or 31.3.2007 was Rs. 1,03,37,058/-. The appellant had stopped paying the installments to PFC; c) the unsecured loans of Rs. 47,16,500/- were lying dormant since the year 1999-2000 and no repayment had been made or interest had been charged; d) the appellant had been penalized by the electricity department for theft of electricity. Also the appellant had shown receipts from storage of bags for which payments of Rs. 40/- per 50 Kg bag were made. However, the appellant could not give proper details of unsecured loans etc. The inward and outward registers of the cold storage could not be produced to show the number of bags entering the cold storage and how many had been taken out. The debtor's b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is basically agriculturist and does not have the knowledge of accountancy. In-ward and out-ward registers were maintained by the 'Munshi' at the Cold Storage and he had no background of accountancy. Ld. CIT(A), recorded a finding on appreciation of the factual matrix of the case, submissions made by the assessee and remand report filed by the AO. Ld. CIT(A), recorded a finding that it is clear that appellant has not maintained books of account and other relevant documents, as are required under the Act. He has admitted that no in-ward or out-ward Stock Registers have been maintained for the storage. Ld. CIT(A) referred to the decision of the Hon'ble Supreme Court in the case of CIT V British Paints India Ltd. (1997) 188 ITR 44 (S.C) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the storage capacity of cold-storage at 67656 bags of 50kg each. The AO, further calculated the hire charges at Rs.40 per bag and further observed that if the cold storage works at 90% of its capacity, hire charges should be Rs.27,06,240/-. The appellant in its reply stated that the installed capacity of such plant was 45000 bags and it was further contended that the unit was located far away from the potato growing belt. On average, the capacity utilization for such a plant was 34000 to 36000 bags, for which a storage rate of Rs.30/- to Rs.40/- per bag was received. Thus, total receipts were of Rs.12,44,724/-. Ld. CIT(A), on appreciation of the submission filed before him, held that calculation made by the AO, with regard to number of ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submitted that the inquiries conducted were never confronted to the assessee. What sort of enquiries were made by the Ld. A.O. form the Electricity Department, the Ld. A.O. would also have enquiries about the Electricity load utilized by the assessee Cold Storage. The Ld. A.O. only stressed on the storage capacity of the cold storage on the basis of the letter from the National Horticulture Board, Ministry of Agriculture, Gurgaon, but did not apply the deciding factor, the Electricity load utilized by the assessee, Enquiries made from the Electricity Board also referred to the installation of One Heavy duty Ammonia Compressor set of 40 BHP. Had the inquiries conducted by the Ld. A.O. form the Electricity Department confronted, the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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