TaxTMI 
TaxTMI 
2005 (8) TMI 93
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....closing stock, the purchases and the sales were not verifiable. The stocks are sold at different rates revealing that the same stock was sold at a lower rate and also at a higher rate and that the assessee was unable to explain the item-wise production of different kinds of bricks and failed to explain the fall in average sale figure compared to the last year and the revised tax audit report was also silent about the yield of finished products by commenting "not ascertained" and the Assessing Officer ultimately came to the conclusion that it was clear that the assessee had failed to establish the correctness of the income deduced on the basis of the accounts maintained by the assessee. The Commissioner (Appeals) reversed the order. The learned Tribunal affirmed the order. It is against this order that the present appeal has been filed. Similar is the case in respect of the assessment year 1991-92, though, however, the facts are little different with which we will deal at the appropriate stage. The submission: The appellant/assessee: Mr. J.P. Khaitan, senior counsel, assisted by Mr. Sanjay Bhowmick, appearing on behalf of the appellant, submits that the rejection of the books of ....
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.... counsel for the Department, on the other hand, contended that the materials clearly show that there were discrepancies in the stock register and the vouchers and there were materials before the Assessing Officer and the learned Tribunal to lead a reasonable person to take one or the other view and in such a case it cannot be said that the finding arrived at by the learned Tribunal was perverse. The finding of facts arrived at by the learned Tribunal being concluded finding of facts cannot be disturbed by the High Court dealing with substantial questions of law. He also points out that though not in clear terms but from the materials placed before the court it can very well be said that the Assessing Officer and the learned Tribunal had expressed a view that the income could not be deduced from the accounts maintained. He also pointed out that the assessee had shown income disproportionate to the sale figures without any justification as to why the income should fall in comparison with the earlier years. He points out that though the Assessing Officer had taken the average of the earlier years but the learned Tribunal had taken the lowest of the earlier three years. Therefore, ther....
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....lusion, it must be shown that the Assessing Officer has taken into consideration the various factors and has not omitted to consider the materials before him and has come to a conclusion that the method applied is such that from the accounts the income could not be deduced. In the present case, as pointed out by Mr. Khaitan, it is not in dispute that these goods were excisable goods and that regular monthly returns used to be submitted before the excise authority. Mr. Khaitan drew our attention to pages 110-116 and 118-124 of the paper book. From the said materials, which were produced before the learned Tribunal, it appears that these were returns submitted to the excise authority giving full description of the goods and these were maintained on the basis of the books of account and were verified. There is no allegation that excise duty was avoided. Therefore, from these materials the accounts could be deduced having regard to the accounts reflected in the books of account. He has also drawn our attention to various other materials, which are part of the paper book. Therefrom, it appears that the regular accounts were being maintained. He has also referred to a conciliation of th....
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....matching with those of the Assessing Officer given in the assessment order. The difference of reason cannot be a factor for disagreeing with the decision by the Commissioner (Appeals). The question is dependent on the principle of law. The question is to be determined on the basis of the fact applying the principle of law in the context in which the learned Tribunal is supposed to answer the question. In the present case, the question is as to whether the books of account could be rejected only in the absence of stock register so far as the assessment year 1990-91 is concerned and on the grounds that the item-wise stocks were not maintained in the stock register could be a ground sufficient to reject the books of account for the assessment year 1991-92 without any finding that the accounts were incomplete or were incorrect or that though the accounts were complete and correct, the methods applied were such that the income could not be deduced. Without a finding or forming an opinion to the extent indicated in expressed terms in the section itself, the books of account cannot be rejected, merely on the absence of stock register or failure to maintain item-wise stock in the stock re....
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.... before the Income-tax Officer could apply the provisions of the proviso to section 13. The court cannot "leap in the dark" as was held in the Privy Council in CIT v. Kameshwar Singh of Darbhanga (Maharajadhiraja) [1933] 1 ITR 94. In Omar Salay Mohamed Sait v. CIT [1959] 37 ITR 151 (SC), it was held that if the Tribunal arrives at its own conclusion of facts after due consideration of the evidence before it in respect of a finding of fact, the court is not supposed to interfere. However, every fact for or against the assessee must be considered with due care and the Tribunal must give its finding clearly indicating the questions that arose for determination and the evidence pro and contra and thereafter reach the findings. The conclusions reached by the Tribunal should not be coloured by any irrelevant considerations or matters of prejudice. The Tribunal cannot base its findings on suspicions, conjectures or surmises, nor can it act on improper rejection of materials partly on evidence and partly suspicions, conjectures or surmises and if it so does, the finding is required to be set aside. In S. Veeriah Reddiar v. CIT [1960] 38 ITR 152, the Kerala High Court had held that low pr....
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....es not help Mr. Agarwal having regard to the facts and circumstances of the case, wherein it was held that in order to reject the accounts, the Assessing Officer has to consider the facts and circumstances of the case and come to the conclusion that the method of accounting employed was such that the income could not properly be deduced therefrom. Similarly, the reliance on Amiya Kumar Roy and Bros. v. CIT [1994] 206 ITR 306 (Cal) does not seem to be apt in the facts and circumstances of the present case. There it was held that the failure to maintain stock accounts was a substantial defect in the accounts and that such finding is a finding of fact, which cannot be interfered with, having regard to the question referred to the court. The facts being distinguishable from the present one, we do not think that the said decision can help Mr. Agarwal. The ratio decided in CIT v. Surjit Singh Mahesh Kumar [1994] 210 ITR 83 (All) also does not help us in the present context, in view of the distinguishing feature and the question answered in the said case. Similarly, the decision in Awadhesh Pratap Singh Abdul Rehman and Brothers v. CIT [1994] 210 ITR 406 (All) also does not apply in the ....