9911796707
TMI Blog1994 (4) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) Yarn 2,570 kgs (d) Blankets 990 . The explanation offered by the assessee was that 29,223 kgs. of raw wool belonged to him and the remaining belonged to different parties. The list of the parties to whom the aforesaid goods belonged along with the file and bill book was produced in support of his contention. The explanation was not accepted for various reasons, namely: (a) File and bill book, not found during the course of search, subsequently produced, cannot be relied upon; (b) Goods of the other parties, received for spinning are generally returned within fifteen days' time which was not found to be there; (c) Whereas in case of M/s Paras Wool Traders the goods received on10th July, 1986were returned on26th July, 1986, in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r hand, countered that: With the help of the documentary evidence it was shown that the goods belonged to other parties and were not owned by the assessee. It was also shown that there was no sanctity like fifteen days' period for return of goods after their receipt. By way of chart, it was shown that the goods have been returned even beyond a period of fifteen days. The parties certified that the goods belonged to them. In the face of these, addition was rightly deleted by the learned CIT(A). 5. We have carefully considered the rival submissions and have also gone through the material placed on record. Admittedly the Assessing Officer had obtained copies of accounts of seven parties who confirmed that the raw wool weighing 34,180 kgs., be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year under consideration. The provisions of s. 145(1) were invoked on account of-- (a) non-maintenance of day-to-day stock-cum-manufacturing account; (b) non-recording of all transactions in the books of account; (c) no co-relation between purchases and sales relating to specified items; and (d) fall in yield of wool from 82% in asst. yr. 1986-87 to 75.8% in the asst. yr. 1987-88. 6.1 The explanation of the assessee that fall was due to increase in expenses in card clothing, machinery maintenance and wages was found to be incorrect on comparing the expenses on these items vis-a-vis the gross receipts of the year. Having regard to other comparable cases, the gross profit rate was estimated at 18.6% on the total estimated sales o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.8% in the preceding year and 27.2% in the year before that. Having regard to these facts, the addition was rightly deleted by the learned CIT(A). 9. We have considered the rival submissions. Admittedly during the year the assessee has done substantial business on its own account as compared to earlier years. The accounts had also been maintained as per the past practice when no day-to-day stock register was kept. The assessee had rendered plausible explanation in respect of non-accounting of Rs. 3,825 which stands un-rebutted. Expenses on machinery maintenance, card clothing and wages have registered an increase compared to the quantity of yarn spun, which should have been the case for finding out an increase or decline in the expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the explanation of the assessee as convincing in the light of the evidence rendered both before him as well as Assessing Officer. 11. The learned Departmental Representative submitted that: In her statement before the Assessing Officer, Smt. Vimlesh Singla never disclosed the fact that she had received a gift of Rs. 10,000 from her mother which was in fact utilised in purchase of jewellery. The explanation was an after-thought. This was further confirmed by the fact that Smt. Naraino Devi was not produced for her statement in spite of adequate opportunity allowed. Considering that the factum of the jewellery having been purchased, was not denied by the assessee, the addition was correctly made. 12. The learned counsel for the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visited her parents atLudhianawhere her mother gave a sum of Rs. 10,000 to her as a gift. In her statement during the course of search no direct enquiry was made towards the purchase of the jewellery. On the other hand, the fact remains that despite the request made by the assessee, the Commission was not issued to the Assessing Officer at Bombay for recording the statement of Smt. Naraino Devi who is both income-tax as well as wealth-tax assessee. The purchase of jewellery atLudhianafurther lends support that the same was made by Smt. Vimlesh Singla and not by the assessee. In the circumstances, the addition if at all warranted should have been made her hands and not that of the assessee against whom no evidence has been brought on record ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
