TaxTMI 
TaxTMI 
2013 (8) TMI 196
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....eceivable Day's Collection Balance Sale made to the persons after dedn. of commission thereof Balance receivable From the aforesaid register it had appeared that the sum of Rs. 42,78,717/- was receivable by the assessee from the buyers of fish. Similarly, a sum of Rs. 4,74,681/- was detected to have been advanced to the sellers of fish. These amounts were not reflected in the books of accounts of the assessee. The defence of the assessee was confession and avoidance on the plea that the sum of Rs. 42,78,717/- was receivable on account of the sellers of fish and the sum of Rs. 4,74,681/- had been advanced by the buyers of fish. The aforesaid sum is also the balance outstanding at the end of the financial year 2005-06. The total income of the assessee as per the return was Rs. 1,64,995/-. The Income Tax Officer assessed the income at a sum of Rs. 59,70,687/-. The additions made by him were as follows: "Total income as per Return Rs. 1,64,995/- Add: Suppressed Arat Commission disallowed, As discussed above ....
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....h money was in fact payable or receivable by them. He in support of his submissions relied on a judgment of this Court in the case of Hindusthan Tea Trading Co. Ltd. v. Commissioner of Income-Tax, reported in 263 ITR 289. F. From page 293 of the aforesaid judgment, he drew our attention to the following views expressed by the Division Bench of this Court : "Once an explanation is offered, the Assessing Officer is bound to consider the same. Such consideration is guided by sound principles of law. The opinion so formed must be reasonable and based on materials and shall not be perverse. The extent of the power of the Assessing Officer while considering the materials produced by the assessee is very wide. It is a question of examining as to whether the apparent is real. The Assessing Officer is empowered to lift the corporate veil and examine the real nature of the transaction. In the process, he may exercise its power of examining the materials. He may require the assessee to produce further materials if so required. He may seek information from other sources on the basis of the material produced. In the process of enquiry, the assessee has no right of he....
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....come payable to them was in the special knowledge of the assessee. It was, therefore, her obligation to disclose cogent evidence in that regard. She claims to be a commission agent. The column 5 of GTI-1 provides for deduction of commission. Therefore it should not have been difficult for the assessee to disclose the relevant evidence about the transactions allegedly made by the assessee on behalf of suppliers of fish or the trawler owners. Her failure to do so even prima facie amounts to no explanation at all. Reference in this regard may be made to the judgment in the case of Collector of Customs v. D. Bhoormal 1974(2) SCC 544 wherein the Apex Court opined that "The other cardinal principle having an important bearing on the incidence of burden of proof is that efficiency and weight of the evidence is to be considered according to the proof which it was in the power of one side to prove, and in the power of other to have contradicted." Can it be said that it was not in the power of the assessee to prove the aforesaid facts? In the case of CIT. v. Mohanakala , reported in 2007(6) SCC 21, Their Lordships in construing the expression "the assessee offers no explanation" appearing in....
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....on account of share application money and the genuineness of such receipt was under challenge. It is, in that context that the aforesaid views were expressed which has no semblance with the case before us. The assessee in that case had disclosed relevant evidence to show that it had received applications for allotment of shares together with the requisite amount. The second judgment cited by Mr. Sen is in the case of Maddi Sudarsanam Oil Mills Co. v. CIT [1959] 37 ITR 369 (AP.) wherein the following views were taken. "Where the income-tax authorities reject the books of account of the assessee and compute the gross profits of his business by applying a flat rate on the total turnover, they cannot rely on the books for the purpose of adding cash credits, which were part of the scheme of balancing accounts, to the profits so ascertained" This judgment has no manner of application. The learned Advocate did not also demonstrate before us as to how does this judgment apply to the facts and circumstances of this case before us. The third judgment cited by him is in the case of CIT v. Smt. P.K. Noorjahan eported in 237 ITR 570 wherein Their Lordships h....