TMI Blog1995 (8) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... ance on account of motor car expenses and depreciation thereon should be restricted to 1/5th. This ground succeeds in part. 4. In ground No. 3 it has been contended that the CIT(A) has erred in disallowing Rs. 1,000 being the cost of stamp paper to record the change in the partnership deed. At the time of hearing this ground was not pressed. The same is accordingly dismissed. 5. In ground No. 4 it has been contended that the CIT(A) has erred in confirming the disallowance of Rs. 12,761 being difference in balance sheet. At the time of hearing this ground was not pressed. The same is accordingly dismissed. 6. Ground No. 5 reads as under: "The CIT(A) has also erred in confirming disallowance of Rs. 63,384 being four purchase bills of empty tins from Rajesh Trading Company mentioned at serial Nos. 2,3,4 and 5 in para No. 6(1) on page No. 7. It is submitted that purchase bills at serial Nos. 2 and 3 are dt. 22nd June, 1983 and 28th June, 1983 which happens to be the last week of the previous year. Since the bills/goods are actually received after 1st July, 1983, the charge/accrual of liability for payment of purchase is during the relevant year and, therefore, the same ought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition observing as under: "On careful consideration of the matter I feel that since the entire expenses are not verifiable and as pointed out by the ITO that vouchers to the extent of Rs. 26,261 are self prepared cash vouchers without any support, I am of the view that addition made by the ITO after verification and for the facts deserves to be sustained. I would therefore confirm the addition of Rs. 26,264." 9.3 Also in the Tour Travel Division the assessee had claimed the diesel expenses of Rs. 1,04,348. On verification of the vouchers for expenses claimed, the AO noted that payments to the extent of Rs. 40,031 were not supported by proper vouchers. He, therefore, added the same to the total income of the assessee. 9.4 On appeal, the CIT(A) confirmed the addition stating that "since the facts of the case on this point are similar to that of vehicle expenses, I, for the reasons given above confirm the addition of Rs. 40,031." 9.5 Shri K.H. Kaji, the learned counsel for the assessee, submitted that the CIT(A) ought to have considered the time to time break up of these expenses alongwith Xerox copies of supporting evidence, bills and vouchers filed in the paper book sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition to Rs. 2,26,717 as against Rs. 43,56,464 added by the ITO on account of unaccounted sales." We consolidate both the grounds and proceed to dispose of the same in the following paragraphs. 10.1 The assessee firm deals in edible oil. The oil is purchased in bulk. After filtration it is repacked in the packing of different sizes and sold under the trade name of "PANKAJ". After scrutinising the books of accounts and other records the ITO noted that the number of tins used for packing was less than the number of tins purchased and brought forward as opening stock. He further noted that there was shortage of 13,530 tins of 15 Kg., 778 of 10 Kg., 297 of 8 Kg., 1411 of 5 Kg., 1608 of 4 Kg., 2346 of 2 Kg., 3407 of 1 Kg., 519 of 1/2 Kg. and 78 of 200 Kg. The position has been worked out by the ITO in two annexures appended to the assessment order viz. Annexure 'A' and Annexure 'B'. In Annexure 'A' of his order, the ITO has observed that there is a difference between number of tins purchased and number of tins for packing. This difference is taken by him as shortage. In the same annexure 'A', purchase cost of each empty tin is observed, multiplied with the number of tins taken as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of production. The CIT(A) therefore held that there was no justification in holding that the assessee had sold tins filled with edible oil. 10.3 As regards the shortage of empty tins the CIT(A) noted that full details of such sales were not available and therefore it would be fair and reasonable that addition on account of shortage of empty tins should be made. The assessee argued before him that the issue was covered in favour of assessee by the decision of the Tribunal in the case of the assessee itself for asst. yrs. 1964-65 and 1965-66. The CIT(A) held that such an addition will be justified in spite of the aforesaid decision of the Tribunal because at that time the stand of the assessee was that it was not maintaining any stock of empty tins and it was claimed that stock purchased in one year was being utilised in another year. According to the CIT(A) in this year the position was different because the assessee has made it clear that it had no closing stock of empty tins because they were exhausted either by way of sale or short receipt or damaged or theft but at the same time the assessee has failed to prove that such things really happened. The CIT(A) accordingly held " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... These departments also carry out the supervision and surprise checks from time to time. The assessee also maintains a stock register on day to day basis containing the record of packed tins of different sizes and different quality of edible oil such as groundnut oil, coconut oil, repseed oil etc. In the stock register, the particulars are recorded as under: (1) Opening balance of packed tins (2) Tins packed during the day (3) Packed tins sold during the day (4) Closing stock of packed tins This register serves a dual purpose of recording ready packed tins, tins packed during the day and packed tins sold during the day. As is on the record, the tins are of different sizes and are filled with edible oil of different types. 10.5 The learned counsel for the assessee submitted that the AO has not found any fault and in spite of all proper records maintained which were shown to the AO with due explanations, there was no justification in presuming that the assessee had sold tins filled with edible oil, outside the books of accounts. As regards the addition sustained by the CIT(A) on account of shortage of empty tins the learned counsel for the assessee submitted that though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/49 may be added as closing stock of empty tins, as done in the earlier assessment year." 10.6 The learned Departmental Representative submitted that the assessee had not maintained any proper accounts of the empty tins which fact has been noted by the CIT(A) at page 22 of his order, and as such the addition of Rs. 2,26,718 on account of empty tins is fully justified. As regards the issue that the assessee sold tins filled with edible oil, (which is subject matter of appeal by the Revenue), the learned Departmental Representative relied upon the observations of the AO. 10.7 We have considered the rival submissions and perused the facts on record. Except presuming that the assessee sold tins filled with edible oil, the AO has not brought anything on record to prove that the assessee had made unaccounted purchases. The business run by the assessee is subject to supervision and control of the State authorities under the Essential Commodities Act. The assessee has maintained all registers required by the Civil Supply department and as pointed out by the learned counsel for the assessee nothing adverse was noticed by Civil Supply Department. The business of the assessee is also sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd therefore the same amounts to enhancement because the AO in the two annexures i.e. Annexure 'A' and Annexure 'B' has dealt with the issue of empty tins and the issue before the CIT(A) was not a new one. The action of the CIT(A) does not amount to enhancement because out of total addition of Rs. 43,56,464 he has retained only an addition of Rs. 2,26,718. We however accept the contention of the learned counsel that the assessee had not agreed to the addition of Rs. 2,26,718 as stated by the CIT(A) in his order because as is evident from the paragraph reproduced in para 10.5 the assessee agreed only to an addition of Rs. 17,891 but that factor is not very material. If an addition of Rs. 2,26,718 is called for then the same is to be confirmed notwithstanding the fact whether the assessee agreed to such an addition or an addition of a lesser amount. Accordingly we dismiss ground No. 9 raised by the assessee. 11. Ground No. 10 reads as under: "The CIT(A) has also erred in confirming the disallowance of Rs. 2,12,750 being the commission paid to Ravji Family Trust, Rajkot. It is submitted that the commission had been paid during the course of business and for the purpose of busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and since the assessee failed to furnish the details the AO was justified in making the impugned addition. 11.5 We have considered the rival submissions. It is well settled that principle of res judicata is not applicable to decisions of IT authorities. An assessment for a particular year is final and conclusive between the parties only in relation to assessment for that year and the decision given in the assessment for an earlier year are not binding either on the assessee or on the Department in a subsequent year. In the instant case the AO called for the details which were not filed. In our opinion the AO had every right to go through the details to find out the nature of transactions, terms/rate of commission paid especially when M/s M. Ravji Family Trust is an allied concern of the assessee firm. In our opinion the AO was justified in calling for the details and terms and conditions of commission paid especially when the payee was an allied concern and as such it cannot be said that the issue is a covered one. Further much water has flown through the bridges since 1980-81 and the whole issue deserves to be looked afresh. Under the circumstances we deem it fit to restore thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resentative. The AO disallowed the expenditure for want of details from the assessee. The details were furnished for the first time before the CIT(A) and in all fairness the CIT(A) ought to have called for a remand report or ought to have restored the issue to the file of the AO. Accordingly we restore this issue to the file of the AO with the direction that he should go through the details to be furnished by the assessee and readjudicate upon the issue. 15. The next grievance of the Revenue is that the CIT(A) is not justified in deleting the addition of Rs. 17,118 on account of Hamali charges. The facts are that in the absence of supporting vouchers and evidence the ITO disallowed 50% of charges and made an addition of Rs. 17,118. 15.1 When the matter came up before the CIT(A) full details of the amount paid for loading and unloading were furnished before him. Photo copies of some vouchers were submitted to show that the back side of such vouchers contained the name of each and every contract through whom loading and unloading had been done. The CIT(A) deleted the addition "after going through the month-wise break up of loading and unloading and the photo copies of vouchers." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anted. I would therefore delete the same." 17.2 After hearing both the parties we do not find any merit in the action of the CIT(A) in deleting the addition of Rs. 25,000. The AO asked the assessee to produce the depositor for examination but neither the depositor was produced nor any confirmation was submitted. Thus the assessee failed to discharge the onus which lay upon it to prove the genuineness of the cash credit. Neither the identity of the creditor, nor his creditworthiness, nor the genuineness of the transaction i.e. the three tests laid down by the Hon'ble Calcutta High Court in the case of Shankar Industries vs. CIT (1978) 114 ITR 689 (Cal) were fulfilled by the assessee. The mere fact that the amount was received by cheque and repaid by cheque, is no ground for treating the cash credit as genuine by the CIT(A) as held by the Calcutta High Court in the case of CIT vs. Precision Finance Pvt. Ltd. (1994) 121 CTR (Cal) 20 : (194) 208 ITR 465 (Cal) where it has been held as under. "It is for the assessee to prove the identity of the creditors, their creditworthiness and the genuineness of the transactions. Mere furnishing of the particulars is not enough. Mere payment by ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
