TMI Blog1964 (10) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer is directed to consider afresh the entire material that has already been placed before him, and such other material, such as registers which have been maintained but are admittedly not produced, and other relevant evidence as may be brought before him, and come to a conclusion in regard to the question of unaccounted yarn in the light of the directions given by this court and those given by the High Court in other matters. The Assessing Officer shall not in any case increase the tax liability on this point over and above that he has initially assessed. - - - - - Dated:- 1-10-1964 - Judge(s) : K. SUBBA RAO., J. C. SHAH., S. M. SIKRI JUDGMENT The judgment of the court was delivered by SUBBA RAO J.---These two batc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the Assessing Officer with slight modifications in respect of the " unexplained shortage of yarn." Against the orders of the Appellate Authority the assessee preferred 5 appeals to the High Court. The High Court accepted the Appellate Authority's conclusion as regards the shortage of yarn, but held that the percentage of allowances given by it was not based on any material. The High Court remanded the matter to the Assessing Officer for trial and disposal subject to the directions given by it. Hence the appeals. The contentions of Mr. A. V. Viswanatha Sastri, learned counsel for the appellant, may be summarized thus : (1) Though all the relevant registers pertaining to the assessee's business were filed before the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ister and the Yarn Production Register and that, though the Appellate Authority and the High Court did not in terms reject the said Registers, they relied upon the said two Registers maintained by the appellant himself and, therefore, the findings arrived at by them are findings of fact which should not be disturbed in appeal under article 136 of the Constitution. To appreciate the contentions of the parties it is necessary at the outset to notice briefly the process of manufacture. Before the commencement of the manufacture, cotton is purchased. Then, the cotton is spun into yarn. Thereafter, it is diverted to the manufacture of cloth through the winding and warping and weft sections. The surplus yarn is sent to the reeling section for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e time the cotton is purchased to the time the cloth is manufactured. They also reflect the losses and the accretions made to the yarn of the cloth during the manufacturing process. The Sale Contract Register does not give the actuals. The contracts for purchase are ordinarily placed far in advance of the manufacture. The entries relating to weight in the Register are only the estimate made on the basis of the length of the cloth ordered. Though the entries in the said Register are relied upon for the purpose of sale and for taking stock, they must necessarily give way to those in the Actual Cloth Production Register, if the said Register is reliable. In the absence of such a register or in case the said register is rejected for good reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see filed before the authorities concerned all its registers reflecting the process of the manufacture at the various stages. It was the duty of the authorities to definitely come to one conclusion or the other in regard to the reliability of every one of the relevant accounts filed by the assessee. In the absence of any such finding, it was not open to them to pick and choose some of the registers which were more favourable to the revenue. In choosing the Sale Contract Register, where only nominal weight was given, and ignoring the actuals register, they had accepted notional figures in preference to the actuals without holding that the actuals were not true figures. In accepting the figures in the Daily Yarn Production Register they had n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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