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TMI Blog1984 (11) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ry hire in computing the income of the assessee for the assessment year 1964-65 ?" The assessee-firm is running a rice mill at Ponnampet and also deals in rice and paddy. Admittedly, it owned two lorries during the year of account. There is some dispute as regards the other two lorries used by the assessee. The assessee used to purchase paddy from growers either on cash basis or on suspense account on the understanding that the rate of purchase would be settled at a later date. It is said that most of the persons from whom the assessee effected purchases were either his own kinsmen or people in his sphere of influence. They did not maintain any accounts of their transactions. The Income-tax Officer appears to have made an enquiry into t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e charges of Rs. 17,395 were concerned, the Appellate Assistant Commissioner held that though the lorries were mainly used for assessee's own purposes, it could not be said that the assessee had not used it altogether on hire to others. Aggrieved by the order made by the Appellate Assistant Commissioner, the Department preferred an appeal to the Tribunal (sic). The assessee also filed cross-objection (sic). The Tribunal dismissed the cross-objection of the assessee while allowing the appeal of the Department. The Tribunal has confirmed the order of the Income-tax Officer both in respect of the interest assessed and also on the income representing the lorry hire charges. Counsel on both sides took us through the entire records in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o his sundry creditors cannot be a yardstick for measuring the interest alleged to have been recovered by the assessee from the growers. It must be noted that the assessee is not a money-lender. He might have borrowed from his creditors for the purpose of business. He did not lend money to the growers. His advance payment to growers represented part of the price which he was required to pay upon delivery of the paddy. The two transactions are thus quite different and one has no relation to the other. The basis upon which the Income-tax Officer has estimated the interest said to have been recovered from the growers, cannot, therefore, be sustained at all. There is no independent consideration by the Appellate Assistant Commissioner in rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question in the negative and in favour of the assessee. This takes us to question No. 2 which relates to the addition of Rs. 17,395 towards the income from lorry hire in computing the income of the assessee. The Income-tax Officer has estimated the collection of lorry hire from the growers in addition to the accounts maintained by the assessee. The arbitrary manner in which the Income-tax Officer has proceeded is writ large in the following portion of his order : "Regarding the collection of lorry hire from the growers, the assessee said that it was collected in some cases and that this has been disclosed. He said that sometimes the paddy was brought in the cart of the grower also, but he could not give a break-up of his purchases keep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not go into the question in detail. This is what the Tribunal has stated: "The last item in the cross-objections challenges the addition of Rs. 17,395 to lorry hire. Since we have held that one lorry was being used entirely by the assessee, the addition made for the income from that lorry has to be sustained. The authorities below have taken a very reasonable view about the income from lorry hire and this order calls for no interference. The cross-objection is dismissed." It will be seen from these observations that there is hardly any material on record for upholding the addition of Rs. 17,395 towards the income from lorry hire. The second question in the circumstances must also be answered in the negative and in favour of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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