TMI Blog1993 (8) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... xamination of accounts, it was noticed that the assessee did not show any sale of chilka while in another case of the district. sale of chilka was shown at Rs. 92,878 and this was credited to his a/c. In the case of the assessee, the assessee and his counsel have pleaded in response to notice under section 143(3) issued on 18-1-1985 that the chilka was burnt in the drier in its own factory and partly it was got removed from the premises of the factory rather on request of parties. It has also been argued by them that husk had no market and difficulty was experienced in getting the same removed from the factory premises. This contention of the assessee is not tenable especially when in another case, the assessee has similar business, sale of chilka weighing 10246 qtls. has been reflected in the trading a/c. The total chilka in case of the assessee comes to 23044 qtls. After giving benefit of 30 per cent used in drier by the assessee in its own factory, balance chilka sold in the market works out to 16131 qtls. By applying the sale rate of Rs. 10 per qtl., the sale of chilka would work out to Rs. 1,61,310. This is called for an addition of Rs. 1,61,310 in the trading result shown by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce there was no sale of husk, so no receipt was shown and thus there was no justification for making any addition on account of sale of husk. It was argued that for the assessment year 1983-84, there was sale of such husk and the receipt was accounted for in the books and so also for the assessment year 1984-85. According to the learned counsel Sh. Mohan Lal, since there was no sale for the year under consideration, so the receipt was not rightly shown. Mention was made of pages 3 and 4 of the paper book for the proposition that for assessment year 1981-82 no such addition was made and so also pages 5 and 6 for the same purpose. A copy of the assessment order at pages 8 and 9 was pointed out to say that there was no sale of such commodity and so also pages 10 and 13 of the paper book. It was also pointed out that in many cases, there was no sale of such material and that position had been accepted by the revenue. 6. Submissions have been heard and considered. The total quantity of chilka for the year under consideration was determined by the ld. ITO at 23044 qtls. 6913 qtls. was supposed to have been used by the assessee in drier and thus the balance quantity of 16131 qtls. was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant for commercial disposal. The ld. ITO applied a rate of Rs. 10 per qtl. However, it was understood that in case of some other assessee, a rate of Rs. 7 per qtl. was seen to have been noted. We thus in the light of the preceding discussion hold that out of total quantity, after deducting 1/3rd for self-consumption, balance should be supposed to have fetched a price @ Rs. 7 per qtl. The addition to this extent, in our view, should have been confirmed by the ld. AAC in the present case. Since he did not do, his finding is modified to this extent. The ld. ITO, while working out the addition, will keep in view our above observations. 8. The paper book has been perused. 9. In the result, the appeal is allowed in part. Per Shri S.K. Chander ---I have very carefully gone through the order proposed by my learned brother --- Judicial Member --- put up to me on 17-7-1989 on my return from tour. I am, however, not in a position to subscribe to various observations made by him in the order as well as the conclusions drawn by him. Hence this dissenting order. 2. It would be first necessary to take note of and record findings on facts which are not in dispute and in fact have not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the ITO had referred only to "another case of the district" albeit without giving necessary details. In fact after this my learned brother has reproduced the ITO's observations and it becomes crystal clear therefrom that "other cases" were not referred to or relied upon by the ITO except a case whose details were not recorded. I am recording it to emphasise that on such appreciation of facts, in my humble opinion, correct inferences and conclusions could not follow. 4. When the matter came up before the Ld. Appellate Assistant Commissioner in first appeal, he got the details of the case to which the Income-tax Officer had made a reference. He also considered other cases of the area on which reliance was placed from the side of the assessee. Thereafter, he gave a finding of fact that having carefully considered the submissions of the parties, no addition on account of "alleged sale of chilka is called for in this case for the year under consideration". He also pointed out that the cases on which the Income-tax Officer had placed reliance for purposes of comparison with the case of the assessee and for making the addition could not be compared for which he gave reasons in his im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hown by the party that wants his order to be reversed, such evidence which could call for an interference in his order. In my opinion, there is no such evidence. Therefore, no addition can be sustained by reversing the order of the Appellate Assistant Commissioner. 7. It has also to be remembered that normally, a businessman may act with a motive to reduce the incidence of tax. In this case for the year under appeal, it appears, that could not be the motive of the assessee, if at all it could be considered, because the return was filed on 30th August, 1982 declaring a loss of Rs. 1,25,481. Thus looking on the entirety of the facts and circumstances of the case and in comparison to how the other assessees had been treated by the revenue in the same assessment year, in the same line of business and from the same area, there is no justification for sustaining any addition in this case. I, therefore, find no reason to interfere in the order of the Appellate Assistant Commissioner who deleted the addition made on conjectures and surmises. 8. In the result, the departmental appeal is dismissed. ORDER UNDER SECTION 255(4) We have a difference of opinion on the following point : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is not tenable especially when in another case, the assessee has similar business, sale of chilka weighing 10246 qtls. has been reflected in the trading a/c. The total chilka in case of the assessee comes to 23044 qtls. After giving benefit of 30 per cent used in drier by the assessee in its own factory, balance chilka sold in the market works out to 16131 qtls. By applying the sale rate of Rs. 10 per qtl., the sale of chilka would work out to Rs. 1,61,310. This is called for an addition of Rs. 1,61,310 in the trading result shown by the assessee." Urging that this addition was totally uncalled for and was made on suspicion, the assessee filed an appeal before the Appellate Asstt. Commissioner, who deleted the addition observing that the case relied upon by the Income-tax Officer was not comparable with that of the assessee that there are 3 or 4 other cases in the same area, wherein there was no sale of chilka and that fact was accepted by the concerned Assessing Officers and that the assessee when sold the chilka accounted for the sale proceeds in the books of account and that fact was proved by disclosing sales of chilka at Rs. 31,500 in the immediately succeeding assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and substance and reasons to agree with the conclusions reached by the learned Accountant Member. Barring suspicion there was nothing else in the assessment order justifying the addition of Rs. 1,61,310 as sales of chilka. As pointed out by the learned Accountant Member in his order, the Income-tax Officer has not been able to point out where from he arrived at the quantity of chilka at 23044 qtls. There was no denying the fact that the husk was never sold in the earlier years or it was used as a fuel and except for the assessment years 1983-84 and 1984-85 where some sales of chilka were made, there was no sale of husk in any of the years and that position was accepted by the Revenue. What is more for the assessment year 1983-84 when an addition of Rs. 75,784 was made by the Income-tax Officer on similar grounds as obtaining in this assessment year, the entire addition was deleted by the Commissioner (Appeals), of course an appeal is pending against that deletion before the Tribunal. In a case where the husk is not at all sold or capable of being sold except as fuel and where the husk was used as a fuel by the assessee, merely on the ground that some miller in the district at some ..... X X X X Extracts X X X X X X X X Extracts X X X X
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