9911796707
TMI Blog1980 (8) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of assessment. The IAC to whom the draft order and the objections were forwarded, gave his directions on 31st Aug., 1978 approving the proposals and on the same day the ITO passed the final order of assessment. 3. The IAC himself rejected the contention of the assessee that s. 144B was not applicable on the ground that this assessment was beneficial to the assessee and was only procedural and, therefore, applicable to all assessments which were pending on 1st Jan., 1976 or initiated after that date. On appeal, to CIT (A) also in a well reasoned order rejected every one of the arguments put forward on behalf of the assessee for avoiding the application of s. 144-B. He was of the opinion that s. 144B was part of the machinery sections under Chapter XIV and being a matter of procedure the assessee could not have any vested right in it. He also noted that the procedure under s. 144B allowed an option to the assessee either to defer his objections to the stage of appeal and allow the ITO to complete the assessment without objections. He, therefore, concluded that the assessee who choose to exercise the option could not complain against it and, therefore, there was no question of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Jan., 1976. We are unable to accept this argument for more than one reason. Firstly even limitation is a matter of procedure unless it has already expired and created a vested right in the assessee. In the present case, on 1st Jan., 1976. obviously the limitation to make the assessment had not expired. Even at the time of making the draft order, which was forwarded to the assessee on 20th Feb., 1978, limitation had not expired. The assessee had seven days time to send his objections and if he had not opted for s. 144B the ITO could still have completed the assessment before 31st March, 1978 and there would have been no question of the assessment becoming barred by the expiry of the original period of limitation. The argument on behalf of the assessee is that the assessment order made on 31st Aug., 1978 would have been beyond the original period of limitation. But this argument ignores the fact that, that assessment was made because of the assessee choosing to send in his objections and was, therefore, invited by the assessment. Since the period taken for going through the procedure has to be excluded under s. 153(3), Expln. (iv) the order of assessment cannot be considered to hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 41,34,648 pages as against 50,34,622 copies of newspapers. According to the ITO, this was a fantastic state of affairs, as normally the ratio of newspapers to poster was 10 : 1. He accordingly worked out the consumption for posters at that ratio and found that it would have needed only 6.27 tons as against 25.77 tons shown by the assessee, leading to an over-statement of 19.5 tons. He also found that the assessee had shown wastage of 10.3 per cent as against 5.5 per cent and 4.4 per cent disclosed in certain registers maintained by another assessee, whose premises had been raided. He accordingly worked out the consumption of newsprints required by the assessee and made an addition of Rs. 1,12,000 being the value of excessive wastage of 32.011 tons and also an addition of Rs. 12,500 for unaccounted sale of waste, because he was of the view that even the sum of Rs. 10,100 shown by the assessee was inadequate for the waste of 21.933 tons shown by the assessee. 7. In the appeal before the CIT(As), the assessee relied on a tabular statement showing the percentage of waste in the preceding assessment years and contended that the waste of 10.3 per cent shown was not excessive. But the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances, the ITO was required to deduce the correct income of the assessee and this he had done by finding out the newsprint that was required for printing the out turn of the assessee and treating the excess shown to be consumed as unaccounted waste. The assessee has admitted in the objection given before the IAC that the newsprint reconciliation statement was prepared only to deduce the wastage and that the wastage shown by the assessee was not the actual amount of wastage. Therefore, the ITO was justified in deducing the true figure of wastage. What has happened was that the admitted number of copies of newspapers printed did not account for the entire consumption and, therefore, the assessee interpolated the number of posters printed for keeping the wastage at 10.3 per cent. In the statement of comparable data, the assessee has shown the consumption for newspaper at 186,007 tons and posters at 25.775 with wastage at 21.933 tons. Even these figures are apparently incorrect because the admitted number of newspapers printed during the year was 50,34,622 containing 25,700,854 pages, at the standard rate of 16,04,00 pages per ton of newsprint the assessee could have consumed only 160 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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