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Issues Involved:
1. Addition of Rs. 23,64,940 on account of alleged excess payment to bidi workers. 2. Addition of Rs. 16,89,216 on account of excess consumption of leaves. 3. Levy of interest under sections 234B and 234C without a specific order. Issue-wise Detailed Analysis: 1. Addition of Rs. 23,64,940 on Account of Alleged Excess Payment to Bidi Workers: The primary issue in the assessee's appeal was the addition of Rs. 23,64,940 due to alleged excess payments to bidi workers. The Assessing Officer (AO) observed that the Gross Profit (G.P.) percentage of the assessee was lower compared to other bidi manufacturers, and the wages claimed were higher. The AO noted that the wages paid included the cost of leaves supplied by the workers, which led to higher wage rates. Despite the AO's request, the assessee did not produce daily bidi collection reports or wage registers, leading to the conclusion that the wages were excessive. The CIT(A) confirmed the addition, citing the absence of supporting records and the inability of the assessee to justify the higher wages. The assessee argued that the lower G.P. was due to lower selling prices compared to other manufacturers and that the wages included production commissions. The assessee also contended that the higher wages were justified due to the inclusion of bidi leaves supplied by workers. The Tribunal found merit in the assessee's arguments, noting that the books were regularly maintained and audited, and the AO did not find specific defects. The Tribunal set aside the addition and remanded the matter to the AO for verification of records and figures, directing a test check of wage registers and other relevant documents. 2. Addition of Rs. 16,89,216 on Account of Excess Consumption of Leaves: The Revenue's appeal involved the deletion of an addition of Rs. 16,89,216 for excess consumption of leaves. The AO made the addition based on a comparison with other manufacturers, disallowing 50 grams of leaves per 1000 bidis. The CIT(A) deleted the addition, stating that the AO did not provide evidence or material to show that the actual consumption was different from the records and did not point out any defects in the books. The Tribunal upheld the CIT(A)'s decision, noting that the consumption of bidi leaves is subject to various factors such as dry age, soaking, size, and natural conditions, which can vary. The Tribunal agreed that the addition was based on surmises and conjectures without concrete evidence, and thus, the deletion was justified. 3. Levy of Interest Under Sections 234B and 234C: The assessee raised an additional ground challenging the levy of interest under sections 234B and 234C, arguing that the AO did not specifically order the imposition of interest in the assessment order. The Tribunal admitted the additional ground, referencing the Supreme Court's decision in Ranchi Club Ltd., which held that interest could not be recovered merely by way of a demand notice without a specific order. The Tribunal noted that in the present case, the AO had calculated the interest in the body of the assessment order, making it clear that the interest was intended to be charged. The Tribunal distinguished this case from others where no such calculation was made in the order. Consequently, the Tribunal held that the levy of interest was valid and dismissed the additional ground raised by the assessee. Separate Judgments Delivered by the Judges: The Judicial Member (JM) and the Accountant Member (AM) had differences in their approach to the issues. The JM admitted additional evidence and directed a comprehensive re-examination by the AO, including the verification of new documents and the GP rate. The AM focused on verifying the facts and figures provided by the assessee without expanding the scope significantly. The Third Member, Vice President M.K. Chaturvedi, concurred with the JM's broader approach, leading to a majority decision to remand the issues for a thorough re-examination by the AO, including the verification of additional evidence. In conclusion, the Tribunal allowed the assessee's appeal in part by remanding the issues for further verification and upheld the validity of the interest charged under sections 234B and 234C. The Revenue's appeal was dismissed, confirming the deletion of the addition for excess consumption of leaves.
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