2004 (1) TMI 306 - AT - Income Tax

Issues Involved:
1. Whether the CIT(A)'s orders were in conformity with the Tribunal's directions.
2. Whether the directions given by the Tribunal amounted to setting aside the addition made under sections 68/69A.
3. Whether the CIT(A) was justified in excluding the additions made under sections 68/69A while passing the impugned orders.
4. Whether the CIT(A) was justified in determining the taxable income at the specified amounts.

Issue-Wise Detailed Analysis:

Issue 1: Conformity with Tribunal's Directions
The Tribunal set aside the CIT(A)'s orders and remanded the cases for fresh adjudication, directing the CIT(A) to follow the Tribunal's order dated 22nd June 1993 in the case of M/s Ganesh Rice Mills. The CIT(A) was instructed to ensure that the addition of Rs. 33,87,550 was not made twice-once by way of sale of paddy as shown by the assessee and second on account of sale of rice as contended by the Department. The CIT(A) was required to either take out the amount of Rs. 33,87,550 from the ultimate addition on account of trading results or add the actual profits from milling of paddy. The Tribunal's directions were clear that the CIT(A) should not make the addition twice.

Issue 2: Setting Aside Additions under Sections 68/69A
The Tribunal's directions in the case of M/s Ganesh Rice Mills implied that the addition of Rs. 33,87,550 should not be made twice. This was interpreted by the CIT(A) as not making the addition under sections 68/69A again. The CIT(A) excluded the additions made under sections 68/69A while recomputing the total income, as the Tribunal had directed that the addition should not be made twice.

Issue 3: Exclusion of Additions under Sections 68/69A
The CIT(A) excluded the additions under sections 68/69A while recomputing the total income. The Tribunal's directions were interpreted to mean that the addition under sections 68/69A should not be made twice. The CIT(A) followed this interpretation and excluded the additions while determining the total income.

Issue 4: Determination of Taxable Income
The CIT(A) determined the taxable income by considering the total quantity of paddy milled and the yield of rice and by-products. The CIT(A) computed the total income after deducting the sale proceeds of paddy already credited in the books. The CIT(A) allowed additional expenses incurred on milling of paddy and included other income like rent and insurance. The Tribunal's directions were followed, and the total income was computed accordingly.

Conclusion:
The CIT(A)'s orders were in conformity with the Tribunal's directions, and the exclusion of additions under sections 68/69A was justified. The determination of taxable income by the CIT(A) was correct, subject to minor adjustments in expenses allowed. The Tribunal's directions were clear that the addition of Rs. 33,87,550 should not be made twice, and the CIT(A) followed this directive while recomputing the total income.

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