TMI Blog1994 (12) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... llate authority. 3. In the context of the abovesaid controversy, some basic facts and sequence must necessarily be first stated because there was two types of evidence brought on record by the learned CIT(A), one at the request of the assessee, and the other as directed by him for disposal of the appeal. 4. The respondent--a partnership firm, filed its return on 19th of October, 1989, showing income of Rs. 58,800. At this stage sequence and events are noticed from the order-sheet of the Assessing Officer up to 29th of March, 1990, which is the date when the assessment-order was passed as also entry of 11th of May, 1990, a photocopy of which has been taken on record by us: "XI. 89.The Dy. CIT, Range-I, Kanpur has accorded approval for scrutiny vide his letter dated 24-11-1989. Issue notice under sections 143(2), 143(3) and 142(1) for 1-11-1989. 1-11-1989. Shri Sunil Tewari, Asstt. of Sh. C.L. Kanodia present. Application for adj. filed. Adj. to 8-11-1989. 8-11-1989. Sh. C.L. Kanodia, C.A. present. Request for adjournment. Adj. to 20-11-1989. 20-11-1989. Sh. M.C. Agarwal, partner, present and Sh. C.L. Kanodia, C.A. written reply filed. To furnish the following details: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equired information. Adj. to 15-2-1990. 27-2-1990. Sh. C.L. Kanodia, C.A. present along with Sh. M.C. Goel, partner. Written reply filed. To furnish the remaining details. Adj. to 7-3-1990. 7-3-1990. Sh. C.L. Kanodia, C.A. present along with Sh. M.C. Goel, partner. Two written replies filed. Case adj. to 16-3-1990. 14-3-1990. Sh. M.C. Goel, partner present voluntarily. Books of account inspected. To furnish the date of purchases and sales of A--in the assessment year 1988-89 and commission paid and payments to Calcutta parties in respect of each such purchase. Adj. to 16-3-1990. 16-3-1990. Sh. M.C. Goel, partner, present along with Sh. C.L. Kanodia, C.A. Statement of Sh. M.C. Goel, recorded under section 131 of the Income-tax Act, 196 1. Required to furnish: (i) Copy of assessment with M/s. Basti Sugar Mills, Basti and Walterganj. (ii) Why 1/3rd of exp. on Dep. on car should not be disallowed. (iii) Why expenses relating to residential phone should not be disallowed. (iv) Furnish details required vide O.S. entry dated 14-3-1990. (v) Reconcile the difference of Rs.71,500 in Basti Sugar Mills. Adj. to 22-3-1990. 22-3-1990. Sh. C.L. Kanodia, C.A. present. Requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty at Calcutta varying between Rs.170 to Rs.320 per hundred bags was debited: on the basis of debit note sent by the assessee's agent. The details of transactions were reproduced in the assessment order and it was also stated that neither any receipt nor any voucher was available with the assessee in support of amount of difference credited to four parties of Calcutta. 7. The ITO thereafter called for some information from the assessee with regard to these transactions regarding the nature of work done by them, to produce the receipts/vouchers for payments made to them, state the relationship and produce correspondence between M/s Hissaria Brothers and the concerned four parties. 8. The assessee explained that the payments were made on account of purchase of Jute goods by M/s Hissaria Brothers, Calcutta, from M/s Triveni Technocoms Ltd., M/s Abhishek Company, M/s. Ganga Ram Ashok and M/s. Ram Kishan Kanhaiya Lal, Calcutta. They had raised debit notes for the proportionate cost of jute goods which were debited by M/s. Hissaria Brothers in the assessee's account and the same was paid throurgh bank drafts. It was also stated that the purchases are made through their agents M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was furnished in support of this contention and according to him it was not explained as to how the four parties to whom substantial amount was paid, came into the picture. He also observed that these parties apparently did not render any services to the assessee to justify the payments and also did not accept the assessee's contention that the letter to M/s. Triveni Technocoms was sent at wrong address. 13. The Assessing Officer, therefore, concluded that the payments were made to the four parties just to inflate the purchase price and to reduce the true profits. The amount of Rs.7,38,000 debited by the assessee in its purchase account as paid to M/s. Triveni Technocoms Ltd., M/s. Ganga Ram Ashok Kumar, and M/s. Abhishek Company and M/s. Ram Kishan Kanhaiya Lal was added as the assessee's. 14. The learned CIT(A) in the appeal against the addition of Rs.7,38,000 firstly accepted the assessee's request for admission of additional evidence on the ground that considering the sequence and the time given by the Assessing Officer, the assessee could be said to have been prevented by reasonable cause from adducing necessary evidence and secondly on his own motion as stipulated under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also a confirmation from M/s. Triveni Technocoms about their assessment orders. Daily price bulletin about the prevalent price in the months of August, September and October, 1988 were also filed. All these documents were forwarded to the ITO for his comments. 1.10. The ITO vide his report dated 24th August, 1990 stated that in respect of page Nos. 23, 37, 41, 42 and 44 the assessee was required to produce evidence vide order sheet entry dated 19-1-1990 but no such evidence was filed at the time of assessment. Page Nos. 88 to 94 of the paper-book are the photocopies of the daily price bulletin of Sunny Trade Association, Calcutta, in which it is mentioned that these quotations are in no way binding on manufacturers' dealers/traders in their individual transaction and the assessee had not furnished any evidence to prove that the said transactions were in fact entered/finalised on these dates. Paper Nos. 95 to 124 are the details of telephone of the partner which are irrelevant unless the assessee furnishes the name and address in respect of each telephone. In Such circumstances, the ITO stated that no such circumstances exist which may entitle the appellant to produce fresh eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has furnished photocopies of the five bargain slips typed on the letter pad of M/s. Hissaria Brothers, Calcutta who happens to be the agent of the assessee at Calcutta. These slips are nothing but concocted evidence, which is clear from the fact that the assessee has admitted that he supplies A--Twill Bags to M/s. Basti Sugar Mills, Basti, on the basis of orders and delivery schedules received from them. By furnishing fake bargain slips the assessee has tried to prove that he had placed orders for purchase of A--Twill bags with four parties of Calcutta as early as in August and September 1988. The ITO has given details of these bargain slips from which it is seen that the assessee received orders in the month of September and October 1988, whereas he had placed orders with the sellers of Calcutta in the month of August 1988 and the payments were not made to the Calcutta party even at the time when actually supplies were made. The ITO has further stated that it is clear that no such orders were placed with the four parties of Calcutta but huge amount of difference was shown to have been paid to them in order to reduce the true profit. According to him, issue of credit notes does n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lear as to how M/s Ganga Ram Ashok Kumar and M/s. Triveni Technocoms Ltd., Calcutta came in picture and were paid difference amounting to Rs.45,000 and Rs.43,200 respectively. The ITO has thus concluded that the assessee paid huge amount of difference to the parties who were neither assessee's agent nor seller's agent and the amount was debited by the assessee in its purchase account to reduce the true profits. 1.17. The appellant was again asked to file some more information by me which was again forwarded to the ITO who sent his report dated 18th Jan., 1991 stating that in all the 10 transactions mentioned in the list filed by the assessee, difference totalling to Rs.4,58,100 has been paid by the assessee-firm to M/s. Triveni Technocoms Ltd., Calcutta. The assessee has tried to establish that in all such transactions M/s. Triveni Technocoms Ltd., Calcutta placed orders for purchase of Jute bags on behalf of the assessee-firm with the brokers of the companies/suppliers, namely, M/s. Sita Ram Farmania and Sons, Calcutta, B.L. Thard Co., Calcutta and others. In all such cases the contracts and the bills were raised by the concerned brokers on M/s. Goel Trading Co., the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to be made at a future date at the prevailing rate. (c) The sale bills are made by the Jute mills in the name of the assessee as contracted on whose behalf the goods had been booked and supplies are made. Confirmatory letters from local party, Mill Broker Jute Mills have already been submitted. 1.19. After considering the appellant's request for admission of fresh evidence U/R 46A, I am of the opinion that the same deserves to be accepted since the documents filed during appeal proceedings are very much relevant to the issues involved and the appellant could not file them at the assessment stage for lack of proper opportunity as the enquiries were conducted in the month of March and the assessment was also framed in that very month. 1.20. Some of the information and documents were filed in pursuance of the enquiries made by me during appellate proceedings by virtue of powers vested In me. Some of the relevant documents pertaining to these transactions in the shape of certificates from the concerned parties in confirmation of the transactions, receipt of payments and supply of goods etc. were called for along with certificates from the brokers through whom the transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firmed these facts. The brokers, through whom the purchases were made by these four parties from the jute manufacturers, have also filed certificate stating therein that the purchases were made by them on behalf of these four parties and as per their instructions, the bills were raised on M/s. Goyal Trading Company and the payment was made by their agents. The appellant has also filed bargain slips indicating the advance bargains made by M/s. Hissaria Brothers, the appellant's agents with the four parties. These bargain slips give detailed description about the names of the sellers, buyers, quantity, quality, rate. date of delivery, amount and all other details which proves that the transactions were made in advance at the then prevailing rates and the actual supplies were made at later dates at the rates prevailing at the time of actual delivery. These slips are In confirmation of the other certificates issued by the agent, the traders, the brokers and the jute mills do not leave any scope for any doubt. 1.23. The ITO has raised certain doubts about the documents filed, specially, about the bargain slips by stating that they are not genuine. No material has, however, been brough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through the agents against the debit notes and bills raised by them are duly supported by their certificates and also the certificates of all the concerned parties. The brokers through whom transactions were made by these parties with the jute manufacturers and who had arranged the supplies from the jute mills, are also strangers and are In no way connected with the appellant. 1.26. The ITO also indicated some misgivings about the actual dates of transactions. As per the certificates of these four parties, the dates of sales shown by them are in fact the dates of bargain and the date of sale shown by the jute mills are the actual date of delivery. The sale bills issued by the jute mills, did not mention the name of the Intermediaries since the transactions were made by the brokers at the instance of four parties and the bills were issued in the name of the appellant on instructions from the said four parties given to the jute mills through the commission agents and all these facts are duly verified from all the concerned parties. 1.27. Regarding ITO's observation that no bills had been made at the time of advance bargains, the appellant has clarified that there is no such syste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, the Revenue's representative did not file any documents but for a copy of the order-sheet requisitioned by the Bench and which has been reproduced in the order above. 19. In the result, the revenue's appeal is dismissed. Per R.K. Bali-- 20. I have carefully and respectfully gone through the proposed order of my learned Sr. Colleague, the JM, but I am unable to agree with the decision upholding the order of the CIT(A) with regard to the deletion of addition amounting to Rs.7,38,000 made by the Assessing Officer on the ground that to such extent, i.e., Rs.7,38,000 the purchase account has been wrongly debited. 21. My learned Sr. Colleague has reproduced the relevant Order Sheet Entry made by the Assessing Officer in para 4 of the proposed order and he has also summarised the reasons and the basis for which the Assessing Officer had made the addition of Rs.7,38,000 in paras 6 to 13 of the proposed order. However, it appears that while dealing with the submissions of the assessee in response to Show-Cause Notice issued by the ITO, in para 12 of the proposed order, an important fact appears to have been ignored, i.e., purchase orders for "A-Twill Bags" by M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s will be amply clear from the sequence of entries in the Order Sheet, reproduced in para 4 of the proposed order of my learned Senior Colleague and also the fact that the books of account of the assessee were impounded on 10-1-1990 and, thereafter a noting is made on 19-1-1990 in the order sheet, requesting the assessee to explain the reasons for making payment of difference to M/s. Triveni Technocoms Ltd., Calcutta @ Rs.240 per 100 bags vide M/s Hissaria Bros. bill dated 8-2-1989 endorsed with bill of Shree Hanuman Jute Mills Ltd., Calcutta and other bills. After this entry, a specific notice under section 143(3) dated 27-2-1990 was also given to the assessee asking him to explain the nature of payment made to M/s Hissaria Bros., agent of the assessee, to M/s Triveni Technocoms Ltd., M/s Abhishek Co., M/s Ganga Ram Ashok Kumar and M/s Ram Kishan Kanhaiya Lal and the assessee did give a reply dated 7-3-1990 to this notice, which has been furnished at page 6 of the Paper Book and as such the assertion of the assessee that enquiries were started only on 16-3-1990 is factually incorrect. 24. However, the grievance of the revenue in ground of appeal No. 2 that the CIT(A) has erred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar; M/s Banwari Lal Thrad Sons; M/s Sita Ram Farmania Sons and M/s Morgan India Co. and the names of the four parties, i.e., M/s Triveni Technocoms Ltd.; M/s Ganga Ram Ashok Kumar; M/s Abhishek Co. and M/s Ram Kishan Kanhaiya Lal do not figure at all in the bills issued by the Jute Mills in favour of the assessee. It is also pertinent to note that during the course of his statement recorded by the Assessing Officer under section 131 of the Act on 16-3-1990, Sh. Maman Chand Goel, partner of the assessee firm, was specifically asked as to why the assessee had not entered into forward contract with the Jute Mills itself for the supply of A--Twill Bags as the assessee was in the know of the fact that it has to supply A-Twill Bags to the Sugar Mills in the sugar season as per its contracts because admittedly the assessee was having dealing with the Sugar Mills for the last 15 years. To this Sh. Maman Chand Goel, partner, replied that there was no practice of making advance booking by the Jute Mills and after this answer when the Assessing Officer asked him as to how under such circumstances the four parties of Calcutta to whom the difference has been paid, have made advance book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 months, in which several remand reports were called by the CIT(A), most pertinent query as to what happened to the amount of Rs.7,38,000 which was claimed to have been paid by M/s Hissaria Bros. by cheque to the four parties of Calcutta was not enquired into. The assessee has claimed that the payment of Rs.7,38,000 was made by M/s Hissaria Bros., purchase agent of the assessee, to these four parties of Calcutta and the assessee, in turn, has reimbursed M/s. Hissaria Bros. by sending drafts of equivalent amount. However, no enquiry worth the name was made as to what happened when this amount of Rs.7,38,000 was deposited in the accounts of these four parties of Calcutta? Whether this amount was utilised by these four parties or it was withdrawn in cash or in some other way it was returned back either to the assessee or to its agent M/s Hissaria Bros. Although the Assessing Officer has made a specific query from the assessee to find out the details of the persons who were partners or Directors of these four parties of Calcutta, yet no categorical answer was given before the Assessing Officer in this regard. Regarding the constitution of these four parties, it was mentioned that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usly no. In such a situation the duty of the Tribunal is explained by the Hon'ble Supreme Court in the case of Kapurchand Shrimal v. CIT [1981] 131 ITR 451, wherein it is held as under: "An Appellate Authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh, unless forbidden from doing so by statute." Even, otherwise, the whole purpose of Income-tax Act is the levy and collection of income-tax, which is rightly due from an assessee and for that purpose the appellate proceedings are merely the continuation of assessment proceedings. The scope of appellate powers and jurisdiction of the Tribunal have been explained by Hon'ble Madras High Court in the case of CIT v. Indian Express (Madurai) (P.) Ltd. [1983] 140 ITR 705 as under: "The primary purpose of Income-tax Act, 1961 is to levy and collect income-tax and as the purpose of the statutory provisions specially those relating to the administration and management of income-tax is to ascertain the tax liability co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... light of my observations given in this order. 33. Regarding deletion of addition of Rs.4,200 made by the Assessing Officer as proportionate interest on money advanced to M/s Manoj Enterprises, I am in agreement with my learned Sr. Colleague that the approach of the learned CIT(A) was quite appropriate in deleting the addition and the action of the CIT(A) in this regard is upheld. 34. In the result of the appeal filed by the Revenue is partly allowed for statistical purposes. ORDER UNDER SECTION 255(4) OF THE INCOME-TAX ACT, 1981 There being difference of opinion between the two Members, who heard the appeal. the following point of difference is framed for reference to the President of the Income-tax Appellate Tribunal under section 255(4) of the Income-tax Act, 1961: "Whether on the facts and in the circumstances of the case, the proposed order of the Judicial Member dismissing the Revenue's appeal on the question of relief of Rs.7,38,000 granted by the CIT(A) can be said to be justified or view taken by the Accountant Member that matter concerning the said relief should be restored back to the file of the Assessing Officer with the directions that he should make enqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve another Indent upon the assessee on 8-10-1988 to supply 1,96,000 A--Twill sugar bags from January to March 1989. 3. M/s Hissaria Brothers, Calcutta which was a proprietary concern of Smt. Geeta Devi wife of Shri Bishan Swaroop Goel who is the brother of the two partners of the assessee-firm was a purchasing agent of A--Twill jute bags for the assessee-firm for Calcutta. Admittedly, the said concern used to charge 1% commission on the purchase value of A--Twill jute bags by the assessee-firm. 4. For the first period, the assessee-firm disclosed G.P. at 9.83% whereas for the second period it had disclosed only 3.32%. The consolidated G.P. of both the periods was worked out to 3.82% as against 5.85% disclosed for the assessment year 1988-89. 5. The purchases and sales made by the assessee especially for the second period was taken up for close scrutiny by the Assessing Officer since there was abnormal difference between the expected total G.P. in trading A-Twill bags and the reflected gross profit as per the trading account of the assessee-firm. A close scrutiny of the trading account disclosed to the Assessing Officer that the amount debited by the assessee in its trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew the difference in amount between market rate and Jute Mill rate. As your honour has verified from our books of accounts on previous hearings that all these goods are directly sold by us to Basti Sugar Mill and other Sugar Mill directly from preparing bilties directly from Calcutta to Sugar Mills, for maintaining continuous supply to the Sugar Mills and also to maintain reputation of our firm. Against these despatches we have not taken delivery at Kanpur to avoid loading and unloading expenses here. Further we have made all payments to Calutta agent through Bank Draft only and collected sale proceeds from Sugar Mills through our bankers State Bank of India, Central Road, Kanpur." The Assessing Officer addressed registered letters dated 23-2-1990, 7-3-1990 and a letter by speed post dated 9-3-1990 to the four Calcutta parties. Letters also were sent to Jute suppliers/Mills at Calcutta. None of the Mills at Calcutta mentioned that the goods were in short supply. On the other hand M/s Ludlow Jute Mills, Calcutta and M/s Kalanauria International, Calcutta have clearly mentioned in their replies that goods of that variety (A--Twill bags) which were supplied to the assessee were fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer held that the assessee failed to prove that the alleged payment of difference to the above-mentioned four Calcutta parties were incurred for business purposes. He held that the assessee debited a substantial amount in his purchase account in respect of each purchase of A--Twill Jute bags in the shape of payment of difference to the above four parties of Calcutta just to inflate the purchase price of A--Twill Jute bags so as to reduce its true profits. The amount of Rs.7,38,000 debited by the assessee in his purchase account towards so called difference paid to M/s Triveni Technocoms Ltd., Calcutta, M/s Ganga Ram Ashok Kumar, Calcutta, M/s Ram Kishan Kanhaiya Lal and M/s Abhishek Company, Calcutta is, therefore, to be added to the income of the assessee. Thus the Assessing Officer completed the assessment on a total income of Rs.8,21,210 for the second period of the assessee-firm. Thus he completed the assessment on 29-3-1990 under section 143(3). The assessee-firm challenged the addition of Rs.7,38,000 in the appeal filed before the CIT (Appeals). 7. As per the submissions made before the CIT (Appeals), the case of the assessee was summarily put by the learned CIT (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sked the A/R of the assessee to file confirmations from the Mills and brokers who supplied goods to the assessee through M/s Triveni Technocoms Ltd., Calcutta. Again the CIT (Appeals) himself asked the assessee to file some more information referred to by him in para 1.17 of his impugned orders with regard to which the ITO sent his report dated 18-1-1991. No doubt, as and when fresh evidence was filed, it was referred to the ITO and his report was obtained with regard to the fresh evidence produced before the Learned CIT (Appeals). Ultimately in para 1.28 the learned CIT (A) came to the conclusion that the payments made to the four Calcutta parties were all made purely for business considerations that all these transactions were bonafide, that the gaps existing at the assessment stage have since been filled by way of certificates from all the concerned parties, that the payments had to be made to these four Calcutta parties on account of fall in rates from the date of advance bargains to the dates of actual supplies and there is no material on record to suggest that the said transactions are in any way not genuine and, therefore, he had deleted the addition of Rs.7,38,000 since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee did give a reply dated 7-3-1990 to this notice which has been furnished at page 6 of the paper book and as such the assertion of the assessee that enquiries were started only on 16-3-1990 is factually incorrect. 12. Thus according to the learned Accountant Member, the assessment proceedings started from the month of November 1989 and were completed on 29-3-1990 and the grievance of the assessee that he was not given a reasonable opportunity before taking an adverse view against him regarding payment of Rs.7,38,000 is not correct. The Accountant Member felt that the bargain slip was nothing but concocted evidence. Further according to the learned Accountant Member, a perusal of the Bills issued by the Jute Mills favouring the assessee indicated the names of the brokers as M/s Ashok Kumar Pawan Kumar, M/s Banwari Lal Thrad Sons, M/s. Sita Ram Farmania Sons, and M/s Morgan India Co. and the names of the four Calcutta parties do not figure at all in the bills issued by the Jute Mills in favour of the assessee. Further according to the Accountant Member, Shri Maman Chand Goel in his statement dated 16-3-1990 was specifically asked as to why the assessee had not entered into fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alcutta parties and it was the duty of the learned CIT (Appeals) to get the enquiries made through the Assessing Officer before coming to the conclusion that the amount of Rs.7,38,000 was part of the purchase price of A--Twill bags which the learned CIT (Appeals) had failed to do. Therefore, following the ratio of the Supreme Court in Kapurchand Shrimal's case and the Madras High Court's case in Indian Express (Madurai) (P.) Ltd.'s case, the learned Accountant member felt that the matter regarding the addition of Rs.7,38,000 should be restored back to the file of the Assessing Officer with the directions that he should make enquiries, though the Intelligence Wing of the Department, if so advised at Calcutta to find out as to what actually happened to the payments made by M/s Hissaria Bros. on behalf of the assessee to the tune of Rs.7,38,000 to the four Calcutta parties and whether any part of this amount was received back directly or indirectly either by Hissaria Bros. or by the assessee. He, therefore, felt that the whole matter should be restored to the file of the Assessing Officer for read judication in the light of his observations given above. 14. I have heard Shri B.C. G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said query Shree Hanuman Jute Mills Ltd., had furnished the following reply; a copy of which is furnished at page 88 of the paper book filed by the assessee: "Two zerox copies of contract for Jute goods of the East India Jute Hessian Exchange Ltd., Calcutta for contract entered with the above party for supply of goods through the brokers as mentioned in contract." A photostat copy of the contract is given at page 90 of the paper compilation. This will show that the assessee namely M/s Goyal Trading Co. had ordered 18,000 pieces of A--Twill bags at Rs.1040 per 100 bags through licensed broker namely Ashok Kumar Pawan Kumar on 25-11-1988. So the Jute Mill which supplied the A--Twill bags under the contract did not whisper anything about any of the four Calcutta parties. If really the purchase order of the Calcutta party was actually taken by the assessee-firm with a promise to give the difference of price then the name of any one of the four Calcutta parties should have been mentioned either in the contract which the Jute Mills had entered into or its name should have been stated by the broker at least who should state that at the instance of one of the Calcutta parties. it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which huge amount of difference was paid to the four parties of Calcutta have revealed that they had sold goods through the brokers other than those to whom the aforesaid amount of difference was paid. A chart as per Annexure 'A' enclosed herewith, clearly depicts that the amount of difference was paid by the assessee to the persons who were neither the sellers broker nor the assessee's agent. Column 4 of the chart shows the name of the party to whom the difference was paid by the assessee whereas column 5 shows the name of broker through whom the goods were sold to the assessee. Transactions mentioned at Sl. Nos. 3 8 were effected through East India Jute and Hessian Exchange Ltd., Calcutta and in those cases there was direct contract between the assessee and the broker concerned and the transaction was regulated through East India Jute Hessian Exchange Ltd., Calcutta. It is thus not clear as to how M/s Ganga Ram Ashok Kumar, Calcutta and M/s Triveni Technocoms Ltd., Calcutta came in picture and were paid difference amounting to Rs.45,000 and Rs.43,200 respectively." 17. Further, it is the case of the assessee that they entered into forward contracts after they conducted barg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ast 15 years. The said sugar mill entered into written agreements with the assessee-firm for purchase of A--Twill jute bags from the assessee. A specific question was put as to when the said sugar mills were its old customers for the last 15 years, why did not the assessee order jute Mills of Calcutta in advance to supply A--Twill jute bags, the answer given is that the Jute Mills of Calcutta do not accept advance bookings. Then another specific question was put as to why in such circumstances, the four Calcutta parties could have placed advance orders on the Calcutta Mills. For that question, no answer could be given. 19. Under section 19 of the Indian Partnership Act, the act of a partner which is done to carry on in the usual way business of the kind carried on by the firm binds the firm. The version given out to the above examination by Shri M.C. Goel was with regard to the usual trade carried on by the assessee-firm and, therefore, it binds the firm. The version given to by Shri M.C. Goel must be taken to an admission on the part of the assessee-firm namely that the Jute Mills of Calcutta do not enter into forward contract for supply of A--Twill Jute Bags. This version was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and found instructive on the question at issue. The Gauhati High Court had held that the implied power of the Tribunal, to remand the case was read in section 254(1). However, the power of the Tribunal to remand a case has been put beyond any shadow of doubt in Rule 28 of the Rules which their Lordships extracted as below: "28. Where the Tribunal is of the opinion that the case should be remanded, it may remand it to the authority from whose order the appeal has been preferred or to the ITO, with such directions as the Tribunal may think fit." It must form an opinion judiciously and thereafter it can exercise the power of remand. A detailed reason may not be given in the decision. The exact nature of the remand order to be passed in a given case is a matter within the absolute discretion of the Tribunal, but the power being judicial it must be exercised judiciously, according to rule and not according to humour; the order must be legal and regular, disciplined as opposed to capricious. A capricious or impetuous order of remand is an abuse of the discretionary power conferred on the Tribunal. When such a discretionary order is made by a Tribunal, a high-powered authority, the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased from M/s Kalanauria International, Calcutta for and on behalf of M/s Triveni Technocoms Ltd., vide contract dated 7-2-1989. As can be seen from the above confirmations they were WI obtained in favour of M/s Triveni Technocoms Ltd., Calcutta who is one among the four Calcutta parties. With regard to the other three Calcutta parties to whom the difference was paid they did not secure any confirmations of the brokers. Further, it is significant the learned Departmental Representative contended that all the contracts referred to in the confirmations referred to above speak about the contracts having been entered into after 12-12-1989. However, according to the version of the assessee, the purchase order should have been placed in August 1988 itself. Therefore, by the confirmations now produced at pages 11 to 17 of the third paper book, the case of the assessee does not advance to any extent whatsoever. On the other hand, the confirmations now produced would be of no relevance whatsoever since they do not speak about the purchase orders obtained by any of the four Calcutta parties in August 1988. There is no evidence whatsoever produced on behalf of the assessee that the brok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply of gunny bags from two units of the same Mill namely Basti Sugar Mills, Basti and Basti Sugar Mills, Waltergunj. On 14-9-1988 under one of the tenders, the assessee accepted to supply 1,42,000 bags from October 1988 to December 1988 and. under another tender accepted on 8-10-1988, the assessee-firm agreed to supply 1,96,000 bags to the sugar mills mentioned above from January to March 1989. The four Calcutta parties are income-tax assessees. Their confirmed copies of accounts in the books of Hissaria Bros. furnished at pages 2 to 5, of the paper first, of the assessee. Excepting M/s Triveni Technocoms Ltd. all other parties respondent to the notices and confirmed the transactions. Regarding Triveni Technocoms Ltd. the information could not become available as their address had not been correctly mentioned there. During the course of proceedings in appeal, the said position was duly clarified vide their letter dated 26-3-1990 (copy appearing at page 22 of the paper book). Along with the said letter not only the detailed confirmation of account was given by them they have mentioned their PA No. also and gave copy of acknowledgement for filing the return for assessment year 1989 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thakuri Devi by stating that that was a case of an appeal filed by the partners against penalty. The AAC had accepted some of the contentions of the assessee after taking into consideration the fact that no penalty had been imposed in the case of the firm. There was no evidence to show the circumstances in which penalty has been cancelled in the case of the firm and it was precisely to ascertain these facts that the case was remanded. However, in the instant case, there was no allegation that the CIT (Appeals) had considered or taken into consideration any fact which was not being confronted to by the department. Similarly he tried to distinguish the case of V.D. Swami Co. (P.) Ltd. stating that in that case, the assessee claimed-payment of gratuity and it was pleaded before the ITAT that the said claim was allowable in view of the relevant Act of West Bengal. The matter was sent back since it required a fresh decision in the light of the provisions of that Act. The case of Jeypore Timber Veneer Mills (P.) Ltd. was also sought to be distinguished stating that when additional evidence is produced before the Tribunal, it can accept it and if the document presented before it req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scussed above, the Assessing Officer stated that the investigations conducted by him were not complete. For instance out of 14 transactions, he could hold enquiry about 8 transactions only by contacting the manufacturers/suppliers of the jute goods at Calcutta. With regard to the other six sale instances, he was not able to conduct the enquiries. Further even the evidences produced before the learned CIT (Appeals) were not of a conclusive nature. For instance in the certificates purported to have been given by the four Calcutta parties to whom the difference of Rs.7,38,000 was purported to have been paid, there are so many omissions. For instance in none of the certificates, the sales-tax number was mentioned. Their telephone numbers were also not mentioned. The dates of the certificates also were not mentioned. By those omissions even the identity of the parties who purported to have been passed the certificates come into a serious doubt. Therefore, since the material ultimately secured or which was present with the CIT (Appeals) is neither wholesome nor decisive and since the evidence is only halfbaked there is every necessity for further investigations to establish the identity ..... X X X X Extracts X X X X X X X X Extracts X X X X
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