TMI Blog1997 (12) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... ar; (vii) Against the action of the CIT (Appeals) in sustaining the addition of Rs. 85,854 relating to the business income for the period 1-4-1990 to 17-5-1990 as against the declared income of Rs. 24,511 only; and (viii) Against the charging of interest under sections 234A and 234B. I.T.A.No. 752/Chandi./1995 is the appeal by the Revenue wherein the grounds taken are:- (i) Against the relief of Rs. 41,27,826 allowed by the CIT (Appeals) out of the total addition of Rs. 45,44,972; (ii) Deleting the addition of Rs. 4 lacs made on the basis of document No. 19; and (iii) Against the allowance of relief of Rs. 9,16,689 out of the estimated income of Rs. 10,02,543 made on account of income for the period 1-4-1990 to 17-5-1990. 2. The assessee firm derives income from manufacture of brass sheets as well as re-sale of scrap. In the assessment year under consideration, the assessee had declared the total sales of Rs. 5,50,37,667 out of which trading sales of brass scrap amounted to Rs. 5,46,70,307. Thus the sales of manufactured goods included in the total sales were only to the extent of Rs. 3,67,360. In the trading account annexed with the return, the assessee had declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of opening stock as on 1-4-1989 then adding the purchases upto the date of search and deducting the sales therefrom. The working is as under:- Stock position as per books of Account of M/s. Lakshmi Metal Works, Jagadhri, Financial year 1989-90 ---------------------------------------------------------------------------------------- Particulars Copper Scrap. Brass Scrap. Brass Sheet. Copper Ingots. Zinc ----------------------------------------------------------------------------------------- Opening stock 16829 19250 6219 - 7607.000 Add: Purchases 243559 301179 91588 2180.400 5708.370 -------- --------- --------- ----------- ---------- 260388 320429 97807 2180.400 13315.370 Less: Closing 148787 274739 123100 *78973.000 - Sales -------- --------- --------- ----------- ---------- 111601 45690 (-)25293 (-)76793.400 13315.370 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 38906 kgs. ---------- Difference ............ 26206 kgs. ---------- ----------------------------------------------------------------------------------------- Particulars Nickel Brass Ingots Brass Dross Brass Billets ----------------------------------------------------------------------------------------- Opening stock 323 5011 9906 (-)36640 Add: Purchases - - - - ------ ------- -------- ------- 323 5011 9906 (-)36640 Less: Sales - - - - ------ ------- -------- ------- 323 5011 9906 (-)36640 The working was arrived at by the assessee without taking into consideration an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be due to shortage. It was submitted that the books of account got burnt in fire during the anti-Mandal agitation while in the custody of the Income-tax Department and as such the assessee's explanation could not be verified. He placed reliance on the sales-tax assessment order where subsequent sales had been disclosed at Rs. 14,37,104 which pertained to under transit sales account. Accordingly it was pleaded that the addition of Rs. 18,86,832 deserved to be deleted. Alternatively it was pleaded that if at all an addition was required to be made on account of alleged sales of stock outside the books of account, then only gross profit earned on such sales could be added and not the entire sales in view of the decision of the Third Member of the Tribunal in the case of ITO v. Gurubachan Singh J. Juneja [1995] 55 ITD 75 (Ahd.). 6. The ld. D.R. relied on the orders of the lower authorities and further submitted that at the time of search, the stock physically found was only 38906 kgs. as against the derived stock of 65112 kgs. and there was a difference of 26206 kgs. On this account. It was submitted that the so-called 'under transit sales account' relating to 19034 kgs. made to M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Accordingly we direct that the unaccounted stock sold outside the books of account should be calculated by allowing shortage at 5% and the addition be restricted to 1.9% on the sale of remaining unaccounted scrap in view of the decision of the Third Member of the Tribunal in the case of Gurubachan Singh J. Juneja which decision has been followed by this Bench in other allied cases of this group. 8. Coming to ground Nos. 4, 5 and 6 in the assessee's appeal, no specific arguments were advanced by the ld. Counsel for the assessee with regard to the partial disallowance out of telephone expenses, vehicle maintenance expenses and depreciation of vehicles. As such the disallowances are upheld for the reasons given by the ld. CIT (Appeals) in the impugned order and all the three grounds are adjudicated against the assessee. 9. Ground No. 7 in the assessee's appeal and ground No. (iii) in the Revenue's appeal relate to estimation of income from 1-4-1990 to 17-5-1990. The assessee had declared the income for this period on estimate at Rs. 24,511 whereas the same was estimated at Rs. 10,02,543 by the Assessing Officer from which relief of Rs. 9,16,689 was allowed by the ld. CIT (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyed in fire while in the custody of the department, the assessee was not in a position to offer any explanation. As such it was pleaded that the addition deserved to be deleted. The ld. CIT (Appeals) accepted the submissions of the assessee and deleted the addition by observing that even in the asstt. order, no details of the alleged entries on document No. 19 were mentioned on the basis of which the addition had been made. The ld. CIT (Appeals) held that no such document was available with the Assessing Officer nor any reference to this document as contained in the appraisal report of the ADI was confronted to the assessee. Accordingly the CIT (Appeals) deleted the addition holding that the same was made by the Assessing Officer on surmises and conjectures and without any material and evidence on record. 12. After hearing the parties to the dispute, we are in complete agreement with the conclusion and reasoning of the ld. CIT (Appeals) which we confirm and for that we make the reasoning and conclusion of the ld. CIT (Appeals) in paras 4 to 4.2 of the impugned order as our own. 13. In the result, the appeal of the assessee is partly allowed and that of the Revenue is dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case, I am unable to accept the plea of the assessee and uphold the order of ld. CIT (Appeals) on the point. Therefore, this ground fails. 5. Ground Nos. 4 to 6 of the assessee's appeal have rightly been adjudicated by my learned brother. I concur with his findings and conclusions on this point. 6. As regards ground No. 7 in the assessee's appeal and ground No. 3 of the revenue's appeal, income was estimated by the assessee at Rs. 24,511, which was determined by the Assessing Officer at Rs. 10,02,543 and ld. CIT (Appeals), on the basis of orders passed in the cases of Gupta Metal Industries and Shiv Metal Engg. Works, reduced such addition, by giving a relief of Rs. 9,16,689 and since the plea in the case of Shiv. Metal Engg. Works has also not been accepted by me for the detailed reasons given therein, in view of the facts and circumstances of this case, I am not inclined to accept the plea of the assessee. Therefore, order of ld. CIT (Appeals) is reversed on the issue and that of the Assessing Officer is restored. The assessee's ground fails and the revenue's ground of appeal succeeds. 7. I do concur with the findings arrived at by ld. Accountant Member in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... President for the opinion of the Third Member:- 1. Whether, on the facts and circumstances of the case, G.P. rate of 1.9% should be applied on the total sales as held by the Accountant Member or the order of the CIT (Appeals) be reversed and that of the Assessing Officer restored as held by the Judicial Member? 2. Whether, on the facts and in the circumstances of the case, the unaccounted stock sold outside the books of account should be calculated by allowing shortage at 5% and the addition be restricted to 1.9% on the sale of remaining unaccounted scrap as held by the Accountant Member or the ground of assessee be rejected in its entirety as held by the Judicial Member? 3. Whether, on the facts and in the circumstances of the case, the Accountant Member is justified in holding that the net profit should be estimated at 1.5% of the sales for the period from 1-4-1990 to 17-5-1990 or the order of the CIT (Appeals) on the point be reversed and that of the Assessing Officer restored? 4. Whether, on the facts and in the circumstances of the case, the order of the CIT (Appeals) deleting the addition of Rs. 4 lacs should be confirmed as held by the Accountant Member or the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltry sum of Rs. 3,67,360 only. In other words, the facts are quite akin to the case of Shiv Metal Engg. Works case. The Tribunal in the Third Member decision of Shiv Metal Engg. Works case has confirmed the applicability of proviso to section 145(1) and GP rate of 1.9 per cent taking note of the past history of assessee's case, facts prevailing in the year of appeal as also the view expressed by the Tribunal in the case of Gupta Metal Industries case, a "sister concern", in I.T.A. Nos. 718 754 of 1995. It has been categorically stated by the Third Member that facts in two cases can never be identical but the reasoning and decision can be considered for application in any other case although assessee's own history is the best indicator. The ld. Accountant Member in his order followed the decision of the Tribunal in the case of Gupta Metal Industries as also his own order-in the case of Shiv Metal Engg. Works to apply a GP rate of 1.9% as against 1.74% shown by the assessee and 2.5% applied by the CIT (Appeals) as against the rate of 10% taken by the Assessing Officer, the latter relying on the assessment order in the case of Sohan Lal Savinder Singh, Jagadhri. The CIT (Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90 to 17-5-1990, the ld. Accountant Member once again relied on the Tribunal decisions in the cases of the sister concerns Shiv Metal Engg. Works and Gupta Metal Industries. The ld. Judicial Member has disagreed with the learned Accountant Member on the ground that the orders cited are distinguishable but without pointing out any such distinguishing features. It is, in fact, the duty of the Tribunal to follow its own decisions whether of the same Benches or other Benches in the country and departure should be on a good and valid ground. If departure becomes the rule and not the exception, then there would be no rule of law leading to chaos and uncertainty. In the final analysis, I agree with the learned Accountant Member in respect of the first three points of difference referred to me. 6. As regards the fourth point of difference, the facts once again are not disputed but extracting these from the order of the ld. Third Member, the Assessing Officer on the basis of "document No. 19" found during the course of the search, made an addition of Rs. 4 lakhs. The said document contained certain weighment entries which were not recorded in the books of account. According to the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y reply. It is an undisputed fact before me that the document was not confronted to the assessee and this has been specifically noted by the ld. Accountant Member, who has also approved the relief given by the CIT(A), noting that details of the alleged entries were not given in the assessment order and nor was there any reference to these in the appraisal report of the ADI. The CIT(A) in fact did not approve of the addition made on surmises and conjectures a view with which the ld. Accountant Member concurred. As against this, the ld. Judicial Member restored the matter to the file of the Assessing Officer for a decision de novo "after due opportunity to the assessee and confronting the assessee with the circumstantial evidence so collected". The ld. counsel argued that the addition of Rs. 4 lakhs itself was improper, more so when the department itself accepted that the total of the weighment entries on the document pertained to the "group concerns". It was the further submission that the setting aside by the ld. Judicial Member was not justified since no material whatsoever was to be confronted to the assessee by the Assessing Officer there being none available on the record and n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remit a case to the subordinate authority for writing such order as would, in the opinion of the appellate authority, be a proper and better order." Their Lordships of the Hon'ble Calcutta High Court in their judgment in the case of United Commercial Bank, made the following observations:- "The Tribunal has power to remand a case for a further investigation of facts but the power has to be exercised with proper discretion. It should not be exercised if all the basic facts necessary for the disposal of the matter are already on record and if these facts appear in the order of the ITO and the AAC." In the case of Saurashtra Packaging (P.) Ltd. their Lordships of the Hon'ble Gujarat High Court took a somewhat similar view by observing that when the relevant document which was a copy of dissolution deed was on the record, then the matter could be decided by the Tribunal by reference to the relevant provisions of the Gujarat Sales Tax Act and rules and the remand to the CIT(A) was not proper. 12. The aforesaid decisions are apt in the present case where nothing was to be confronted to the assessee on set aside and the case was capable of being decided on merits one way or the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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