9911796707
Advanced Search 
TMI Blog1984 (11) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue regarding certain sales being treated as on assessee's own account. It was claimed before the ITO that the assessee firm was acting as depot keepers from three mills of Coimbatore. The mills are Sujan Textiles (P) Ltd., Trimurti Mills Ltd., and Jayalakshmi Mills (P) Ltd. The ITO wanted evidence to show that the assessee was only acting as depot keepers. He called for the contract which would have been entered into by the assessee and the mills respectively. But no contract was produced before the ITO. The ITO also noted that the assessee flatly refused to produce any sales vouchers pertaining to this business on the ground that they were sent to Coimbatore. He then asked the assessee to produce any evidence of receipt of goods in Bomba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He also produced letters from Jayalakshmi Mills Ltd. confirming their appointment as commission agents. Similar letter was produced from Trimurti Mills. Evidence regarding sales-tax paid in Bombay by these three mills was also produced to show that the sales were effected by the mills only. It was also submitted that they had in reply to the summons from the ITO sent the requisite information to him. The CIT(A) accepted this evidence as sufficient to clear the point in favour of the assessee. 5. Against this finding, the Department has come on appeal. The main thrust of the Departmental appeals as explained by Shri Roy Alphonso, is that the CIT(A) had admitted additional evidence without recording reasons why it should be admitted. He h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is expected of him to get evidence of the three mills. It would be only natural for any Enquiry Officer to ask the mills whether the goods were sent to their own or whether they were sold outright to the assessee. We, therefore, think that even on the basis of the ITO's investigations the reply from the mills is absolutely essential before any inference could be drawn regarding the transactions. What the CIT(A) had done was only to fill up this lacuna. She had noted that the three mills already replied to the summons issued by the ITO. These replies by and large confirmed the assessee's version. 7. Thus, when there are preliminary grounds to believe that the assessee's version is supported by the mills, the CIT(A) thought it fit to cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, we think once it is accepted that the assessee was acting only as the depot keepers, no addition need be sustained at all. So, on merits also, we will uphold the CIT(A)'s order. 9. The second main grievance is regarding an addition of Rs. 80,000 made by the ITO in the export account. The assessee had exported certain quantities of coverlets used for beds, quilts, blankets, etc. The turnover disclosed a gross profit rate of 4.02 per cent. in the prior year, the rate was 7 per cent. Quantity particulars had been furnished. The ITO felt that the rate was low. He found that there were no particulars available regarding stitching charges or the wastage. He suggested an addition of about Rs. 9 lakhs on account of these reasons. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But the IAC had put it on ground of excess wastage. Certain statements had been furnished before the IAC to show that the wastage was only 3.39 per cent. The IAC felt that this was excessive. Now, the submission made before the CIT(A) was that show the materials sent and the materials consumed. Certain statements had also been submitted on this basis. Now, we do not know why such submissions could not be made before the IAC. The consumption figures are on the basis of certain assumptions regarding the quantity consumed in terms of metres for each coverlet. The assessee's records would be showing the number of coverlets expected from the various parties and how they were satisfied with the out-turn. These records should have been produced be ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
