9911796707
TMI Blog1981 (1) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... the income from the truck disclosed at Rs. 9,883 in the first period should not have been enhanced to Rs. 14,000. The assessee disclosed the income from the truck in the first period at Rs. 9,883 and in the second period at Rs. 2,006. This was, however, increased by the ITO to Rs. 14,000 in the first period and Rs. 2,800 in the second period. On appeal, the AAC accepted the income as disclose-d for the second period but confirmed the estimate for the first period. 3. The ld. counsel for the assessee has placed before us a statement at page I of the Paper Book which indicates that the income as disclosed for the asst. yr. 1969-70- to 1973-74 and for the asst. yr. 1975-76 was accepted. The range of income shown in this year in both the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh the rate of Gur in Amroha was 2 little lower, the gur was valued at Rs. 55.94 p. per bag because it was Iying at Taran Taran, where the rate was higher. The ld. Deptl. Rep. relies on the orders of the authorities below. 6. We do not find any evidence in the orders of the authorities below on the basis of which it could be said that the value of the closing stock was Rs. 100 per bag. The different figures of purchases or sales furnished by the assessee have not been controverted before us. We, therefore, do not find any ground to sustain the addition of Rs. 1,464 which is deleted. 7. The third ground in the assessee's appeal regarding the disallowance of Rs. 250 out of miscellaneous expenses was not pressed. 8. The fourth ground re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the books of the firm under an account "Seer Khata". In this account sale of agricultural produce was shown to the extent of Rs. 1,02,979 and expenses was shown to the extent of Rs. 26,015. In the immediately preceding year the sale proceeds were shown at Rs. 1,30,552 and the expenditure was shown at Rs. 20,002. The ITO enquired reasons for less sale proceeds in this year and increase in expenditure. The assessee's explanation was that the rate of sugarcane in year was Rs. 11.60 per qtl. as against the rate of Rs. 13.38 per qtl. in the immediately preceding year and this was a reason for less receipts in respect of sugarcane sold. The increase in expenditure was justified by day-to-day details of the expenditure maintained. It was also exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was used by the three partners. It was also submitted that the action of the ITO in estimating the agricultural expenses at 50 per cent of the sales proceeds was not consistent with his observation that the assessee itself had shown increased expenditure in this year. It was pleaded that the entire working of the ITO was without any basis. The AAC considered these facts carefully and first observed that he found such merit in the submission made by the ld. counsel for the assessee. He, however, was of the opinion that one aspect of the matter requires to be considered. This aspect of the matter was that the labourers employed to work in the crusher during crushing season were utilised towards the agricultural operations when the crusher wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yr. 1972-73 and, therefore, the agricultural expenses would not bear the same ratio to the sale proceeds as the ratio for the preceding year. He submitted that when the agricultural activity was not the activity of the firm no addition should have been made in the case of the firm. 13. We have carefully considered the rival submissions. From the order of the Tribunal for the asst. yr. 1973-74 we notice that though the ITO had made the addition of Rs. 55,000 as income from undisclosed sources, he made it on the ground that the expenditure on agricultural operations debited in the account was less than the expenditure which should have been roughly 5 per cent of the Receipts Against the receipts of Rs. 1,30,552 in this year the ITO had est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the three out of four partners of the assessee firm. It is an admitted fact that the land from which the agricultural income had been derived and is shown in the assessee's firm did not belong to the firm. Thus, when the land does not belong to the assessee the assesses firm is under no obligation to explain the reasonableness or otherwise of either the receipts in that account or the expenditure. While making the addition of Rs. 36,374 the ITO had stated that this amount either represented diversion of income through inadmissible expenditure or inflation of credits in the agricultural account. Even in the asst. yr. 1973-74 it was not the case of the Department before the Tribunal that the assessee firm had diverted a part of its income by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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