9911796707
TMI Blog1974 (3) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... 31st January, 1963, made an addition of Rs. 2,25,000 to the total income mainly on the ground that the production of sugar was not correctly disclosed. The Income-tax Officer was of the opinion that the norm of yield ought to have been higher and there was something wrong in the low production shown in the return. According to the Income-tax Officer, there were two possibilities for showing low recovery of sugar during the relevant period. One of the possibilities was the suppression of production of sugar and the other possibility was the inflation of the purchases of sugarcane. He ruled out the possibility of suppression of production of sugar because of the control by the excise authorities under the Central Excise Act and Rules. He, however, inferred that illusory purchases were shown as real purchases by the assessee. He drew that inference from the fact that the assessee had failed to produce " purchas ", which, in his opinion, would have shown genuine purchases. The Income-tax Officer also took into consideration the fact that two of the mills situated in North Bihar had shown recovery of 9.3 per cent. and 9.5 per cent. of sugar respectively. In his opinion the assessee-com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ective check of the accounts but have relied on the internal checking of the staff of the mills. In the course of the arguments this fact was pointed out to Sri Banerjee and some of the entries were also referred to him. In the circumstances, it is implicit that no reliance can be placed on the audited accounts of M/s. S. R. Batliboi & Co . ............... Even if we assume that the entire cultivation of surgarcane of the area allotted to the assessee by the Government has been purchased by the miller, in the absence of quantity and the rate of consumption which it bears to the sales we are unable to give a finding that the entire purchases of sugarcane have been utilised in the manufacture of sugar." The Tribunal also took into consideration the fact that two other sugar mills of the same area had shown recovery of 9.3 per cent. and 9.5 per cent. of sugar. It appears that on behalf of the assessee reliance was placed also on the certificate given by the Alipur Test House. The Tribunal, however, rejected that certificate on the ground that there was nothing to show that the samples of syrup had been drawn at random. The Tribunal ultimately held that the addition of Rs. 2,25,000 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " In Omar Salay Mohamed Sait v. Commissioner of Income-tax, it was observed as follows: "We are aware that the Income-tax Appellate Tribunal is a fact-finding Tribunal and if it arrives at its own conclusions of fact after due consideration of the evidence before it, this court will not interfere. It is necessary, however, that every fact for and against the assessee must have been considered with due care and the Tribunal must have given its finding in a manner which would clearly indicate what were the questions which arose for determination, what was the evidence pro and contra in regard to each one of them and what were the findings reached on the evidence on record before it. The conclusions reached by the Tribunal should not be coloured by any irrelevant considerations or matters of prejudice and if there are any circumstances which required to be explained by the assessee, the assessee should be given an opportunity of doing so. On no account whatever should the Tribunal base its findings on suspicions, conjectures or surmises nor should it act on no evidence at all or on improper rejection of material and relevant evidence or partly on evidence and partly on suspicions, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee to divert the sugarcane for the manufacture of jaggery in spite of checking by the officers of the Excise Department. It is manifest that the finding of the Tribunal that some of the purchases of sugarcane could have been transferred for the manufacture of jaggery is based purely on surmises and conjectures. That finding, therefore, must be held to be bad in law and it must be ignored. As I have already stated, the Income-tax Officer and the Tribunal have placed reliance upon the recovery of sugar by two sugar mills of North Bihar during the relevant period for the purpose of arriving at the finding that the recovery shown by the assessee-company was low. The names of these two sugar mills are not to be found either in the order of the Income-tax Officer or in the order of the Tribunal. The fact that the names of these two sugar mills were not disclosed to the assessee at any stage is an admitted position. It has, therefore, been rightly contended on behalf of the assessee that the principle of natural justice has been violated in so far as reliance has been placed by the Income-tax Officer and the Tribunal on the recovery of sugar during the relevant period by the two suga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Cane Commissioner. Sub-rule (2) of rule 29B provides that the requisition slips and identification cards to the members of a cane-growers' co-operative society shall be issued by such society. Dr. Pal produced before us the specimen copies of the requisition slips which are required to be issued for the purchase of sugarcane in accordance with the provisions of rule 29B(1) and (2). In the requisition slips there is no column for mentioning the weight of the sugarcane purchased. It was, therefore, rightly contended on behalf of the assessee that the requisition slips, which have been loosely termed as parchas by the Income-tax Officer and the Tribunal, would not have shown the actual purchase of sugarcane by the petitioner. If in the parchas the actual weight of the sugarcane is not mentioned, it is difficult to comprehend as to how the parchas would have disclosed the genuine purchases made by the assessee-company. I, accordingly, hold that both the Income-tax Officer and the Tribunal have illegally drawn an adverse inference against the assessee from the non-production of parchas, which, if produced, would not have shown the actual quantity of sugarcane purchased by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count, the registers and other documents filed by the assessee. The assessee had filed a number of documents and registers which included rough cash books, fair cash books, ledgers and journals. Under rule 38(1) of the Bihar Sugar Factories Control Rules, 1938, the manager or purchasing agent, as the case may be, is required to maintain clear and accurate records of all purchases made. As provided in the rule, such records shall show: "(a) the name, parentage and full address of the person from whom cane is purchased, (b) the name, parentage and full address of the person who actually delivers the cane, (c) the gross weight of the cane including the weight of the cart. (d) the weight of the cart (tare) (e) the net weight of the cane purchased, (f) the rate at which the cane is purchased, (g) the date of purchase. (h) the amount of loan advanced to the person from whom the cane is purchased, (i) the date on which the loan was advanced, (j) the calculated price that has to be paid for the cane purchased, (jj) the deductions made under clause (3) of rule 31 for payment in a deferred instalment, (k) the amount actually paid on account of the cane purchased, (l) the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal in connection with the documents filed by the assessee has been quoted in extenso. From this observation it appears that the Tribunal also rejected the account books, registers, etc., because the parchas were not produced by the assessee. The Tribunal has treated the parchas as primary evidence and the other records as subsidiary evidence. It is difficult to comprehend the reasoning of the Tribunal when actually the parchas could not be primary evidence of the fact of actual purchase of sugarcane by the assessee-company. In Income-tax Appeal No. 1341 -Pat. of 1969-70, which I have referred to above, the Triburial has relied on those very documents and registers, which were produced by the assessee in the instant case, to show the actual purchase of sugarcane. The Tribunal in that case has made the following observation: ".. ...... a separate ledger account for each of the growers is maintained and a ledger folio is given in the weighment register. Under the circumstances, if one wants to verify the purchases of sugarcane he should rely on the weighment register and not on a slip or purja which was just in the shape of an identity slip or a card that the goods of the ho ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
