1995 (4) TMI 92

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....leshwar, Panathur, etc., incurred Rs. 15 per quintal in the transportation of its purchases to its business place at Kanhangad. The classification in the purchase bills showed that the assessee purchased rubber sheets in RMA-5 grade, but the sale bills showed the classification as RMA-4 grade, in the case of sales to M/s Dunlop India Ltd., and as RMA-5 grade in the case of sales to north Indian parties. he also noticed that RMA-4 grade is superior in quality to RMA-5 grade. He further noticed that the difference in the sale price of RMA-4 grade and RMA-5 garde was Rs. 10 per quintal during the period from 1st April, 1990 to 10th Dec., 1990, and it was Rs. 15 per qtl. on 14th Dec., 1990. It was Rs. 20 per qtl. on 20th Dec., 1990. On 17th Jan....

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....s can be graded as to 80% of RMA-5 and 20% of RMA-5. In this view of the matter, he made an addition of Rs. 100 per qtl. on the sale of 5,428 qtls and thus made an addition of Rs. 5,42,880 to the income of the assessee. The assessee appealed. The learned CIT(A) was of the view that during the months of July, August and September, the average sale price was less than the average purchase price and it is common knowledge that the period during June to October is an off-season for rubber and that did not mean that in the trading of rubber there should be loss in that period. According to him, in view of the limited supply of rubber in the off-season it could fetch higher price during that period and that indicated the possibility of suppressio....

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....es is alone questioned, but it is to be remembered that none of the north Indian parties was examined. It is also to be remembered that sales to north Indian parties are on credit. No instance of the assessee having received anything more than what has been stated in the sale bills has been pointed out. The accounts have not been impeached either for want of vouchers or for lack of information. Merely because in some months or on some dates the selling price is less than the purchase price, an adverse inference has been drawn against the assessee to the effect that it must have in collusion with its north Indian parties resorted to underinvoicing of its sales. There is not an iota of evidence on record except the suspicions or surmises base....