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TMI Blog1996 (12) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture and sale of sugar candy and also camphor tablets and marketing camphor, etc. The Assessing Officer observed that the selling price of sugar during the month of November was Rs. 6.10 per kg. in the market as against the sale price of Rs. 5.78 shown by the assessee. The Assessing Officer issued show-cause notice to the assessee and intimated it the difference between the selling price of the assessee as well as the selling price of sugar in the market throughout the month of November. The Assessing Officer also asked the assessee to show cause why the gross profit should not be increased. The assessee's representative appeared before the Assessing Officer and agreed to the addition of Rs. 2 lakhs towards gross profit. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit of Rs. 2 lakhs to the income returned. It was argued before the CIT(A) that the assessee had agreed to the addition of Rs. 2 lakhs under the painful circumstances and therefore, the addition should be deleted. The CIT(A) did not accept this contention of the assessee and observed that by agreeing to the addition of Rs. 2 lakhs the assessee prevented the Assessing Officer from making further enquiries and probe into the matter and after making such agreement the assessee cannot be allowed to resile from the position taken before the Assessing Officer. In these circumstances, the CIT(A) sustained the addition of Rs. 2 lakhs made in the assessment. 3. The assessee is in further appeal before the Tribunal. The learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the Department to rely on, otherwise all steps leading to the prosecution of the assessee will be launched. After making through investigations of the assessee's case, though the Assessing Officer found no discrepancy or otherwise, asked the assessee to have no objection in enhancing the value of closing stock of Camphor. The assessee's counsel stated that if such an enhancement is made, naturally the value of the opening stock of the subsequent year will get boosted in value, which will in turn reduce the income of the next year and, therefore, the assessee gave a 'no objection' letter dated 27-2-1989. The Assessing Officer had a second thought in that he wanted to make an addition of Rs. 1 lakh but could not find any valid reason ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. counsel contended that a compromise entered into by counsel in excess of his authority will not be enforced and especially when the counsel's consent is obtained under duress, the assessee will not be bound by it. The ld. counsel relied on the decision of the Andhra Pradesh High Court in CIT v. Andhra General Finance Corpn. [1985] 156 ITR 386/20 Taxman 312 and urged that the fact that the assessee treated the amounts as its income in the assessment is immaterial and irrelevant and not conclusive, for, there is no estoppel against the statute. Reliance was also placed on the decision of the Supreme Court in the case of CIT v. Manick Sons [1969] 74 ITR 1. It is contended that as held by the Calcutta High Court in the case of Alipurduar Tea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e market in the month of November was at Rs. 6.10 per kg. the assessee has recorded the price at Rs. 5.78. However, the Assessing Officer has not indicated as to how much sugar was sold by the assessee in the month of November and what was assessee's explanation with regard to difference in selling price as pointed out by the Assessing Officer. No other discrepancy was pointed out by the Assessing Officer in the transactions entered in the books of the assessee, and no defects in the books of the assessee were also pointed out by him. If the assessee had agreed for the addition of Rs. 2 lakhs towards the gross profit then there must have been some basis for such agreement. There are no statistics on record to show as to how the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the agreement of the assessee for addition of Rs. 2 lakhs, is not correct. If in the opinion of the Assessing Officer, the assessee had suppressed or understated its income and certain addition is to be made to its total income, then there must be some evidence brought on record by him to prove such under-statement, etc., which is lacking in the present case. According to the CIT(A), the assessee had agreed for the addition of Rs. 2 lakhs when it was caught with the problems of facing enquiries from the Assessing Officer. The CIT(A) also observed that by agreeing to such addition the assessee prevented the Assessing Officer from making further enquiries and probe into the matter. There is no reason why the Assessing Officer should not ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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