TMI Blog1996 (10) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... ct answers to the following questions : " 1. Whether, on the facts and in the circumstances of the case and also in the light of the facts repeated in the enclosures to the reference application the Tribunal is justified in deleting the addition of Rs. 1,72,761 ? 2. Whether, on the facts and in the circumstances of the case and in the light of the facts repeated in the enclosure the example given by Tribunal is correct and is not the reliance on the example misplaced and the deletion based on a wrong understanding of facts, amounts and accountancy ? " The factual matrix is very plain and requires only common sense to understand the situation which has been rightly appreciated by the Income-tax Officer as well as the first appellate au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of liquor during the year in question reached Trivandrum not on April 5, 1980, but on the next day on April 6, 1980. This is evident from the perusal of annexures (1) and (2) to the assessment order, specifying the seal and initials of the sales tax check post at Perumanoor and Aroor. In view of this situation, the Income-tax Officer held it to be beyond doubt that the assessee had sold liquor in excess of the quantity available with him as per the books of account and records. Even then the Income-tax Officer took into account the opening stock of Rs. 18,962 and reached the figure of Rs. 1,81,399 required to be explained. Even thereafter the Income-tax Officer deducted profit at the rate of 5 per cent. and called upon the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required procedure, as sales are controlled under the provisions of the Abkari Act. The inevitable conclusion is reached that obviously such stocks should have been received only in a manner not revealed by the books. In the process of reasoning, the first appellate authority confirmed the conclusion by a detailed and satisfactory discussion in regard thereto in paragraphs 3 and 4 of the order. The Income-tax Appellate Tribunal did not agree with the said conclusions. In fact, the situation is of a natural by-product of common sense reasoning. Even a bare perusal of the statutory requirements of section 69 of the Income-tax Act, 1961, would be more than sufficient in the context. If the assessee is required to maintain books of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consists of purchase consideration which was not disclosed plus the profit. The Tribunal further observes that when the assessee is offering the entire sale proceeds as income, the amount invested in the purchase of goods get automatically taxed as income. It is difficult to accept the reasoning because it is obvious from the factual matrix that the assessee has not shown the entire sale proceeds as income as is floating on the surface of the record of account books. What is clear is that there are sales during the period from April 1, 1980, to April 5, 1980, without there being a stock sufficient enough for purchasing the quantity which is admittedly sold. The situation gets more than affixed when there is material that the first consignme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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