1978 (6) TMI 63

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....and it got the cotton ginned through outside parties and the quantities were supported by the bills of the ginning factory showing the cotton received by them from the assessee and the resultant lint and cotton seeds delivered to the assessee. That this is so is not disputed by the ITO. But the ITO did not accept the explanation of the assessee who had shown a yield of 36.1 per cent in the earlier year. According to the ITO the yield of cotton should have been 36 per cent and on this basis he worked out the short fall at 40 qtls., the value of which was worked out by him at Rs. 29,600 and this amount was added to the book results. 2. The assessee appealed to the AAC. Before the AAC the assessee contended that in view of the fact that the....

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....he ginning was carried on in a factory not owned by the assessee himself. He, therefore, held that the yield shown in this case of 34.2 per cent on cotton account could not be said to be low. 3. Apart from this, there was a cotton business done in Khandwa & Harda where the yield shown was 34.7 per cent and the ITO took it at 36 per cent with the result that he made an addition of Rs. 27,213. For the reasons given by him with regard to the cotton purchased and ginned locally the AAC held that the addition in respect of Khandwa & Harda Cotton also could not be sustained. The total addition made by the ITO of Rs. 56,813 was thus deleted by this the AAC. The Department is aggrieved by order and has come in second appeal before us. 4. The ....