TaxTMI 
TaxTMI 
2002 (1) TMI 272
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.... purchased lime stone from Shri M.L. Grover, Katni, as under:-- ----------------------------------------------------------------------------- S.No. Bill No. Date Rate per MT & Amount weight ----------------------------------------------------------------------------- 1. 44/90-91 28-2-1991 439.950 m.t. Rs. 29,916.10 @ Rs. 68 2. 93/90-91 28-2-19....
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....ra 1 filed alongwith appeal memo, the said addition was narrated as unjustified and uncalled for. The appeal was decided on 11-8-1992 in appeal No. Kat./15/92-93, wherein CIT(A) declined to adjudicate the issue regarding addition of Rs. 1,29,215 observing as under:-- "Para 3"--I have considered the submissions, but- I do not find any merit in them. Although in the assessment order, learned Assessing Officer proposed an addition of Rs. 1,29,215 in the ultimate computation, no such addition has been made. Therefore, the appellant cannot be said to be aggrieved. As such, no adjudication is required." 4. Subsequently, vide order dated 11-11-1992 under section 154, the Assessing Officer rectified the mistake whereby addition of Rs. 1,29,215 which was discussed in the body of the assessment order dated 14-1-1992 but left to be included in the computation, is included in the computation. Before passing the order under section 154 an opportunity of being heard was given to the assessee. In response to show-cause notice under section 154 the assessee's counsel, Shri P.C. Jain, Advocate, appeared. He filed a written reply wherein it was contended that the addition in the assessment order w....
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.... issue arising from the orders of authorities below is whether there was a mistake within the meaning of section 154 or not. The order of Assessing Officer was also upheld by the learned CIT(A). Therefore, the appeal of the assessee be dismissed. 7. Rival submissions were considered. We have carefully gone through the orders of the authorities below. From the perusal of order of learned CIT(A) dated 11-8-1992 in appeal No. Kat./15/92-93, it is clear that he declined to adjudicate the issue of addition of Rs. 1,29,215. In response to notice under section 154, the learned counsel for the assessee, Shri P.C. Jain, Advocate, who appeared on behalf of the assessee, before the Assessing Officer, in written reply, contended that the addition in the assessment order was made on a wrong footing and, thus, there was no mistake apparent from the record within the meaning of section 154. No specific ground was taken in appeal filed before learned CIT(A). The CIT(A) declined to interfere with the order of the Assessing Officer. If at all, there was a grievance then the assessee should have filed an appeal before the Tribunal against the observation of CIT(A) in para 3 in appeal No. Kat./15/92-....
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....erefore, of the opinion that ground No. 2 is not arising from the order of Assessing Officer under section 154 or the order of CIT(A) against which the assessee is in appeal before us. We, therefore, do not find any infirmity in the order of CIT(A) and the same is upheld. 8. In the result, the appeal of the assessee is dismissed. Per Agrawal, Accountant Member--I have perused the order proposed by my colleague, the learned, Judicial Member. However, I could not persuade myself to agree with the conclusion arrived at. Therefore, I am compelled to record my finding separately. 2. The facts are narrated by my learned Brother. However, for the sake of completeness, I would like to repeat the same briefly. The assessee derives income from manufacturing of lime. The Assessing Officer has recorded in page 2 of his order that the purchases of lime worth Rs. 1,29,215 is not verifiable. He, therefore, came to the conclusion that it is a case of inflation of purchases by the assessee and the total amount of Rs. 1,29,215 is added back to the total income. In the next para, the Assessing Officer, further recorded the finding that the yield shown by the assessee is quite low. He, therefore, a....
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....re than Rs. 1,29,215 and, therefore, no separate addition for inflation of purchase can be made. 5. The learned DR relied upon the order of the Assessing Officer as well as the CIT(A). He stated that the Assessing Officer found that there was inflation of purchases. Since the assessee could not properly explain such inflation of purchase, the Assessing Officer recorded the finding for making the addition of Rs. 1,29,215. Since while making the computation of income, this amount was left to be added, the same was rectified and added in the order passed under section 154. Not making the addition of Rs. 1,29,215, while computing the total income in the order passed under section 143(3) was an apparent mistake and, therefore, the Assessing Officer was fully justified in rectifying his own order under section 154. The same should be upheld. 6. I have carefully considered the arguments of both the sides and have perused the material placed before us. It is undisputed that the Assessing Officer found the inflation of purchase of lime stone and he also found that there was low yield of lime. The yield of lime disclosed by the assessee was 50 per cent. The Assessing Officer adopted the yi....
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....by the CIT(A)?" 2. Relevant facts are that while completing assessment for assessment year 1991-92 the Assessing Officer noted that assessee was found engaged in the manufacture and sale of lime and also extraction of lime stones. The Assessing Officer further noted that assessee had shown yield of lime at 50 per cent as against consumption of coal of 23 per cent. According to him, the yield of lime shown by the assessee was considered to be low and for that he gave the yield of M/s. Nigam & Sons and M/s. Sethi Lime Works who had shown yield at 60 per cent and 62 per cent respectively. The Assessing Officer further proceeded to examine lime stone purchases made by the assessee and noted that assessee had purchased lime stone from M.L. Grover, Katni as under: ----------------------------------------------------------------------------- S.No. Bill No. Date Rate per MT & Amount &n....
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....Lime Traders, Katni, the assessee. The Assessing Officer also observed that assesee was not maintaining any stock register and in the absence of that it was not verifiable whether the lime stone so purchased reflected in the closing stock or not. On the basis of above he was of the view that it was a case of inflated purchases and he worked out the total amount of above purchases to the extent of Rs. 1,29,215 and observed that the same is to be added to the total income. It is also relevant to point out that Assessing Officer rejected the rate of yield shown by the assessee and adopted the yield of lime at 55 per cent and made an addition of Rs. 3,86,486. 4. The noteworthy thing is that while computing the income the Assessing Officer did not add Rs. 1,29,215 on account of inflated purchases. The assessee appealed before the CIT(A) and he raised one ground to the effect that Assessing Officer was not justified to treat the amount of Rs. 1,29,215 as unexplained purchases but CIT(A) did not decide the issue because no such addition was made by the Assessing Officer while completing the income. CIT(A) was of the view that assessee was not aggrieved for want of such addition made in t....
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....6,486 to the trading result and that must be the reason that no addition of Rs. 1,29,215 on account of inflated purchases was made by the Assessing Officer and that too consciously because this amount must have been included in the trading addition. Accordingly, the contention is that there was no mistake in the assessment order and Assessing Officer should not have proceeded to make addition of Rs. 1,29,215 under section 154 of the Act. 7. So far as merits of the case is concerned, learned counsel for the assessee submitted that assessee had purchased lime stone from M/s. Rameshwar Enterprises through four bills reproduced in the assessment order during the months of January and February 1991. It was an account of minor mistake that name of proprietor of M/s. Rameshwar Enterprises was shown as M.L. Grover while it is Mr. R.P. Dube who is the proprietor of that firm. This mistake has been clarified before CIT(A) vide letter dated 3-8-1992, copy appearing at page 4 of the paper book II, filed by the assessee. The Assessing Officer deputed its Inspector to verify the purchases and report of inspector had come on record. The said report dated 11-12-1991 reads as under appearing at pa....
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.... ground that Assessing Officer had not made the addition in the computation of income that is why the assessee did not challenge the addition in the appeal preferred by the assessee before the Tribunal. When Assessing Officer made the addition under section 154 of the Act then assessee again challenged that very addition before the CIT(A) who had decided the issue vide order dated 30-1-1997 after noting as under: "3. At the time of hearing, learned counsel for the appellant argued that the Assessing Officer was not justified in making an addition of Rs. 1,29,215 on account of inflated purchaser. I have gone through the order of the Assessing Officer, facts of the case and the submissions of the learned counsel and I find that the order of the Assessing Officer is perfectly correct. It is important to mention here that in this case appeal against quantum asstt. has been disposed of by the CIT(A). This issue has also been disposed in the appellate order but has not adjudicated as there was no specific ground in the appeal." 10. The contention is that CIT(A) wrongly observed that assesee had not raised specific ground in the first inning while this ground was very much available and....
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.... he was justified to rectify the said mistake as the same was apparent from the record. 14. So far as merit of the additions are concerned, the learned D.R. submitted that assessee himself had stated to have made the purchase from M/s. Rameshwar Enterprises owned by Mr. M.L. Grover and Assessing Officer was justified in deputing his Inspector to verify from M.L. Grover about the said purchases who denied such transactions. In the absence of any other evidence the Assessing Officer was justified to treat the same as inflated purchases. The assessee had not filed the copies of the bills of M/s. Rameshwar Enterprises nor copy of account of that concern in the books of assessee were furnished before Assessing Officer or before CIT(A) that is why these were not taken into account. These documents were manipulated and were not before the Assessing Officer or the CIT(A). The addition was rightly made and rightly confirmed by the learned J.M. 15. Learned counsel for the assessee in rejoinder submitted that copies of bills of M/s. Rameshwar Enterprises, copies of ledger and certificates were very much filed before the CIT(A) and his statement was at par. The contention is that it is wrong....
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.... was also mentioned by the Income-tax Inspector in his report dated 11-12-1991 that he would submit the complete report after verification of bill books of both the parties. The very basis of addition is report of Income-tax Inspector but that report is incomplete nor the same was confronted to the assessee nor the Assessing Officer asked the assessee to produce the proprietor of M/s. Rameshwar Enterprises. It was the duty of the Assessing Officer to have waited for second report of the Income-tax Inspector or called upon the assessee to produce the proprietor of M/s. Rameshwar Enterprises. Both these acts have not been done by the Assessing Officer and initial mistake lay with the Assessing Officer who without confronting the assessee with the report of Inspector or without affording an opportunity to assessee had proceeded to make an addition treating the purchases as inflated one. The very action of the Assessing Officer was not justified. As stated above, CIT(A) in both the innings failed to address themselves to the core issue viz., the genuineness of the purchases made by the assessee. Learned Members have also not looked into the material available on record and a perusal of....