TaxTMI 
TaxTMI 
1981 (7) TMI 103
X X X X Extracts X X X X
X X X X Extracts X X X X
....e a part of the price of the said land was not paid by the assessee, an amount of Rs. 11,623 was paid by the assessee as interest. Both the lower authorities, the ITO and the Commissioner (Appeals), disallowed the claim of the assessee on the short ground that the interest was in respect of the land which the assessee was acquiring for establishment of a new unit. The Commissioner (Appeals) in paragraph 3 of his order found the reliance of the assessee on Calico Dyeing & Printing Works v. CIT [1958] 34 ITR 265 (Bom.) as misplaced and applied the well known Supreme Court decision in the case of Challapalli Sugars Ltd. v. CIT [1975] 98 ITR 167. 5. The learned authorised representative for the assessee vehemently argued that the Commissioner (Appeals) is in error in distinguishing the case of Calico Dyeing & Printing Works and his reliance in the case of Challapalli Sugars Ltd. is misplaced. He submitted that the administration, management, control, planning, etc., was one and the same of the assessee's business at Bombay and the new proposed unit at Delhi and in that light if the business was the same, then the assessee's claim ought to have been accepted and he placed his relianc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....red to therein, also came to be referred by the Gujarat High Court in the case of Bansidhar (P.) Ltd. In the said case also, their Lordships attached more importance to the overall control and common fund from which necessary capital and working funds were supplied to various business activities and the said case also supports the contention of the assessee. In the said case, their Lordships made the observation : "If there was complete inter-connection, inter-lacing, inter-dependence and dovetailing of the different business activities carried on by the assessee and all the activities constitute one and the same business, the deduction on account of retrenchment compensation by the assessee upon closure of one of its business and the write off outstanding dues as bad debt in the other were liable deductions." Since there is no dispute about the fact in the instant case that management, control, business organisation, funds, etc., were the same, the assessee's claim deserves to be accepted. In the result, we reverse the finding of the Commissioner (Appeals) and allow the interest claim of Rs. 11,623. 7. The third and the fourth grounds in the appeal by the assessee pertain....
X X X X Extracts X X X X
X X X X Extracts X X X X
....p; 2,95,000 3. Swastik Rayon Corporation 2,05,000 4. Kailash Trading Corpn. 2,43,000 5. K. G. Corporation &nb....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eedings, can be categorised into three types. The first is those who were completely supplied with goods by the assessee in the form of crimp yarn. Secondly, those who were supplied for part of the credits by the crimp yarn and the third one, Mahavir Yarn Agency, who was not supplied crimp yarn at all. When the cash credits were disputed by the assessee before the Commissioner (Appeals), he accepted the claim of the assessee in respect of the amounts for which goods were supplied but for amounts for which no goods were supplied, the Commissioner (Appeals) sustained the addition. It will not be out of place to mention that in respect of three items, in respect of parties Nos. 2, 4 and 7 above, delivery challan for certain goods were made but the same were since not supplied came to be reversed subsequently as detailed in the order of the Commissioner (Appeals) and such items for which the goods were not supplied and items for which entry pertaining to supply of goods was reversed and the assessee paid off the cash to the respective parties, the additions were sustained by the Commissioner (Appeals). There is no dispute about the fact that from parties to whom goods were supplied, or....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the former Bench of the Tribunal when it heard the matter earlier and he submitted that overdraft facility of the assessee was to the tune of Rs. 10 lakhs and to that effect he placed a certificate from the bank on the assessee's compilation. He took us through itemwise seriatim that on certain occasions money was not needed at all, on certain occasions if it was utilised, it could be obtained through overdraft facility and on certain occasions it was for payment to sister concerns or to employees which too could not be that pressing as to warrant introduction of cash credits. He submitted that whatever burden in respect of the said amounts was there on the assessee, it was discharged by it. He also submitted that the assessee could also show cash sales and there was no restrictions on that. As per his submission, the total amount of Rs. 16,62,000 were genuine credits and in respect of the addition of Rs. 12,24,634 deleted by the Commissioner (Appeals) and contested by the revenue in its appeal, he placed his reliance on the order of the Commissioner (Appeals) whereas for the balance amount of Rs. 3,22,366 and Rs. 1,15,000 not deleted by the Commissioner (Appeals) he vehemently....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hich has to be taken into consideration for sustaining any addition of the type which is under consideration. We do not want to encumber this order by the details of advances received by the assessee date-wise and goods supplied for them and the reasons for which the ITO made the additions and also the reasons for which the Commissioner (Appeals) deleted the additions, because the same are very well detailed in the order of the Commissioner (Appeals). From the action of the Commissioner (Appeals) what we find is that according to him the amounts received in advance for which goods were supplied were genuine whereas amounts for which goods were supplied and returned and not supplied at all were not genuine. His view cannot be sustained in respect of items for which goods were supplied and returned because the assessee's submission all through has been that it was due to fluctuations in prices of the said crimp yarn, due to delay caused by the purchasers that the assessee declined to supply the goods and, therefore, they elected to receive back their money. The strongest pedestal for the assessee is that there are sales in respect of six parties and these sales have been accepted by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f Rs. 2,43,000. 3. Laxmi Trading Corporation - Goods not supplied for Rs. 90,321 out of Rs. 4,14,000. In the third category would fall Mahavir Yarn Agency to whom no goods were supplied and total amount of Rs. 1,15,000 was returned. We may mention that in respect of Rayon and Textiles, Kailash Trading Corporation and Laxmi Trading Corporation a total sum of Rs. 3,22,366 for which no goods were supplied, is verifiable from stock book. 11. When we looked at the stock register, we found that the sales of crimp yarn was chronologically shown in the said register and as well were shown the return of goods. It is incorrect to say that these are shown on a separate paper. The assessee deals in several items and in the said register where crimp yarn sales are shown, sales of other items are also shown, whereas on certain papers where other sales are shown, crimp yarn sales are not shown, but there is no flaw in the said stock register. Now looking to the fact that orders were oral and there was no acknowledgment of the assessee when the advances were received, the parties are not traceable, that too after a number of years, and that the signatures on delivery challans and receipts....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ors to whom goods were supplied. Moreover, a perusal of the statement of Shri Kailash N. Shah shows that whatever he has alleged is in respect of polyester yarn and not in respect of crimp yarn, because in respect of all these seven parties the entire cash was received for purchase of crimp yarn and the issue pertains to sale of crimp yarn. Even when we look to the report of the ITO filed by the departmental representative as required by this Tribunal on an earlier hearing, we may take into consideration certain items for the sake of sample where cash was received by the assessee. For example, on 1-1-1974, out of Rs. 50,000 received by the assessee from Kailash Trading Corpn., the entire payment was made to the sister concern of the assessee, Similarly, on 8-1-1974, Rs. 45,000 were paid to sister concern of the assessee which was received from Kailash Trading Corpn. and similarly on 16-1-1974 Rs. 30,000 which were received from Laxmi Trading Corpn. and Kailash Trading Corpn. were again given to sister concern of the assessee. Even on other occasions other money so received were given to sister concerns or utilised for purposes which could be postponed or for which the assessee was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or confirm the addition of Rs. 1,15,000 for whom no sales were made but remit that matter to the file of the ITO. 14. When we get guidance from the decision of the Supreme Court in the case of Omar Salay Mohamed Sait v. CIT [1959] 37 ITR 151, we find the following observation of their Lordships on page 170 of the report : "We are aware that the Income-tax Appellate Tribunal is a fact finding Tribunal and if it arrives at its own conclusions of fact after due consideration of the evidence before it this Court will not interfere. It is necessary, however, that every fact for and against the assessee must have been considered with due care and the Tribunal must have given its finding in a manner which would clearly indicate what were the questions which arose for determination, what was the evidence pro and contra in regard to each one of them and what were the findings reached on the evidence on record before it. The conclusions reached by the Tribunal should not be coloured by any irrelevant considerations or matters of prejudice and if there are any circumstances which required to be explained by the assessee, the assessee should be given an opportunity of doing so. On no acc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted by the ITO for which amount was paid by cheque vide Item No. CY/9 on page 8 of assessee's compilation. 2. Mahavir Yarn Agency has filed a letter before the ITO dated 10-8-1978 on page 6 of revenue's compilation denying any amount with the assessee. 3. What is stated in letter dated 10-8-1978 is at variance with the transaction noted above of Rs. 34,034. 4. Mahavir Yarn Agency is assessed to income-tax and sales tax as per above letter. 5. Amount in dispute was received in cash, a bill was made on 7-6-1974 but cancelled. In the light of these facts stated above for Mahavir Yarn Agency, we remit back the issue to the file of the ITO with a direction to re-do the same again after giving full opportunity to the assessee and after putting relevant correspondence going against the assessee to him. 15A. In the light of the above discussion, we confirm the action of the Commissioner (Appeals) in deleting the sum of Rs. 12,24,634 but would reverse his finding for not deleting the sum of Rs. 3,22,266 out of Rs. 16,62,000. We, however, restore back the issue pertaining to Rs. 1,15,000 in respect of Mahavir Yarn Agency to the file of the ITO to be done de novo. We are als....