TaxTMI 
TaxTMI 
2004 (1) TMI 297
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....cer is directed to reduce the subsidy received by the assessee from the actual cost of the assets for the purpose of allowing depreciation and Investment Allowance. 2.2 Accordingly the appeal filed by the Revenue is allowed. 3. ITA No. 785/ASR/1989 is the appeal by the assessee in which the following grounds have been taken:- "1. The Ld. CIT(A) has erred in sustaining addition of Rs. 4,38,040 by treating the same as unexplained investment or sales of 466 MT of Rice Bran Extraction. 2. The Ld. CIT(A) has erred in not appreciating the assessee's explanation regarding loss caused in storage and transit of Rice Bran Extraction from Bhatinda to Gujarat. 3. The Ld. CIT(A) has erred in sustaining addition of Rs. 52,957 as unexplained investment, on 9800 Litres of Hexane. There is no justification for rejecting the assessee's explanation." Grounds of appeal Nos. 1 & 2 relate to the addition of Rs. 4,38,040 made by the Assessing Officer which has been confirmed by the CIT(A) relating to alleged unaccounted sales of 466 M.Ts of Rice Bran extraction. Briefly the facts are that the Assessing Officer while examining Schedule XVII of the Balance Sheet found the position of R....
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....tion from Bhatinda to the port town and subsequent loading and unloading at the port town for shipment. However, the Assessing Officer did not accept the explanation given by the assessee as reasonable and made addition of Rs. 4,38,040 on account of non disclosure of sales of 466 MTs of Rice Bran extraction @ Rs. 940 per MT. 4.1 The assessee appealed and the learned CIT(A) confirmed the addition for the reasons given in the impugned order and particularly the fact that the assessee has not been able to furnish information in respect of any comparable case to show the percentage of loss in respect of Rice Bran extraction in similar circumstances and also the fact that there was greater gap of period between the despatch from the factory and loading in the ships which could result in moisture loss. 4.2 In second appeal before us, Sh. Mohan Lal Advocate, learned representative of the assessee, submitted that the departmental authorities were not justified in considering the shortage claimed in the Rice Bran extraction due to transportation and storage as excessive. Sh. Mohan Lal, Advocate, has furnished a chart at page 1 of the Paper Book indicating the shortage claimed in two o....
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.... at Rs. 1,77,302 and as such the shortage on account of transportation loss should have been quite less. He accordingly submitted that the departmental authorities were justified in making the disputed addition of Rs. 4,38,040 representing the value of Rice Bran Extraction, which was wrongly claimed by the assessee as shortage. 6. We have considered the rival submissions. A perusal of the Assessment Order as well as the order passed by the CIT(A) indicates that the shortage claimed by the assessee in the transportation and shipment of Rice Bran extraction was 3.07%, which was considered as excessive by the Assessing Officer. Before the Assessing Officer as well as the CIT(A) the assessee has not furnished any comparable cases. However, in appeal before us, the assessee has furnished details with regard to the shortage claimed in the Rice Bran extraction on account of transportation in comparable cases of M/s. Bhatinda Chemicals Ltd., Bhatinda and M/s. Roshan Lal Oil Mills. Admittedly these details were not furnished before the Assessing Officer. Even before us the information in relation to M/s. Roshan Lal Oil Mills Ltd., Bhatinda for the Asstt. Year 1984-85 is not available. In....
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....-1-1994 by my learned brother Shri R.K. Bali but have not been able to re-concile myself to the conclusions reached by him as far as the assessee's appeal is concerned. 10. The facts regarding the assessee's appeal has been dealt with by my brother in paras 3, 4.1, 4.2 and 4.3 and, therefore, need not be repeated. 11. Para 4.3 of my learned brother's order speaks of loss of weight and shortage, which occurred on account of transportation from the assessee's factory to the Port and further loss/shortage from the Port to the Ship on account of loading and unloading. 12. However, my brother has not closely perused the Chart as page 1(a) of the Paper Book though he has referred to the same in para 4.3. He has taken the Chart to be indicating the loss of weight occurring from the assessee's factory upto the stage of loading in the Ship. Chart at page 1(a) indicates the loss of weight on high seas, which, as a specimen, was explained from shipping stage onwards supported by Shipping Bills and weight for which actual bill was issued by the assessee. Pages 2 and 3 are the photocopies of Shipping Bills indicating that goods shipped weighed 250 Mt. Tonnes (page 2-150 Mt. Tonnes and ....
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....; S.S. "Metohija" (025720) C/D 31-8-82 No. 30965/211 ref: MT. 32.250 Indian Rice Bran Extractions Bedi/Cork B/L 20-12-82 No. BCL-16. Certificate No. 33.B6292. We enclose first Certificate of Analysis and ask you to advise us whether you accept this result. Yours faithfully, For European Grain & Shipping Ltd. Sd/-" 15. The CIT(A) upheld the action of the Assessing Officer on the ground that no comparable cases were brought to his notice....
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....automatically because adjustment had to be given. In such view of the matter, there was no case for making addition as understated closing stock and in any case in the year under appeal, which is deleted. 19. In the result, according to me, the assessee's appeal is to be allowed on both the counts as also the Revenue's appeal because the dispute therein is covered by the Hon'ble jurisdictional Punjab and Haryana High Court as noted in para 2.1 of my brother's order. ORDER U/S 255(4) OF THE INCOME-TAX ACT, 1961 As there is a difference of opinion between us on the following point, we refer the same to the Hon'ble President of the Appellate Tribunal for further action as provided under section 255(4) of the Income-tax Act, 1961:- "Whether the proposed order by the learned Accountant Member restoring the matter back to the Assessing Officer in relation to the addition of Rs. 4,38,040 and confirming the addition of Rs. 52,957 in respect of assessee's appeal can be said to be correct or the proposed order of the Judicial Member allowing the assessee's appeal on both the counts can be said to be correct and justified?" THIRD MEMBER ORDER Per Shri B.M. Kothari, Accountan....
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....the orders proposed by the learned Accountant Member and the learned Judicial Member. I, therefore, do not consider it necessary to repeat those facts. 6. Before dealing with the merits of both points of difference, it would be imperative to state that Board for Industrial & Financial Reconstruction has after making an enquiry under section 16 of the Sick Industrial Companies (Special Provisions) Act, 1985 recorded its opinion that it is just and equitable that M/s. Chhatar Extractions Ltd. (the appellant) should be wound up. The said opinion was forwarded to the Hon'ble High Court for taking suitable action for winding up the company. The Hon'ble High Court, in view of the aforesaid opinion of B.I.F.R. ordered the company to be wound up and the Official Liquidator was ordered to take into custody all the properties and effects and the books of account of the Company. This fact clearly shows that the Company was ordered to be wound up on account of bad financial position. The matter relates to the assessment year 1984-85 and the period of about 20 years have already passed. 7. The Assessing Officer on the basis of facts and details given in Schedule XVII of the balance sheet ....
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....5) the orders of the tax authorities have proceeded on surmises and conjectures without pointing out any defect in the accounts and other records maintained. The aforesaid are "illustrative" and not exhaustive and particular facts in a given case have to be kept in mind. It is the duty of the Tribunal to correctly assess the tax liability of an assessee by considering all such grounds including additional grounds raised which go to the root of the matter and are relevant and incidental to the issue raised, provided the facts on the record. The estimation on account of percentage of rice and various by-products entails application of the proviso to section 145(1). The rule of consistency is an important aspect of tax proceedings and views should not be changed on the same set of facts and the position of law remaining the same, the rule of res judicata notwithstanding. On the question of estimation of income from paddy. Held, (i) that it was not the endeavour of the Special Bench of the Tribunal to decide the percentages of yield applicable to each and every assessee as these would depend on the facts of each case and vary from assessee to assessee depending on numerous ....
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....he view proposed by the learned Judicial Member of deleting the said addition of Rs. 4,38,040. 11. As regards the next addition of Rs. 52,957 made in respect of alleged unexplained investment in relation to 9,880 litres of Hexane being excess stock notified to the bank in the stock statement as compared to the stock as per books of account, the assessee explained before the learned departmental authorities that variation between the closing stock shown to the bank and as per books of account was on account of the fact that some quantity of Hexane remains in the Pipelines, at the end of the year which was not accounted for till the end of the relevant accounting year but was accounted for in the next year in consonance with such practice consistently adopted by the assessee for last several years. The addition so made in respect of closing stock on the basis of stock statement submitted to the bank by disbelieving such an explanation will require value of opening stock of next year to be increased by an equivalent amount which will result in reduction of assessable income of next year by an equal amount. Such an addition will not result in any gain to the Revenue. The learned dep....