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TMI Blog2003 (8) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 7,43,779 having been made by the Assessing Officer under section 68/69A of the Income-tax Act, 1961 and confirmed by the Tribunal, the CIT (Appeals) was justified in recording a finding that the additional income to be added to the income declared was thus arrived at Rs. 92,163 and after adding the profit and difference in purchase tax and the Bardana account, addition upheld by the ITAT, the total income as per Annexure A arrived at Rs. 1,57,780 , instead of Rs. 9,01,559 [addition made by the Assessing Officer under section 68/69A of the Act and confirmed by the Tribunal plus Rs. 1,57,780 as business income computed by the CIT (Appeal) him self]?" The learned Accountant Member did not agree that question No. 2 was properly worded. In his opinion, the following question reflected the difference which was necessary to be considered under section 255(4) of the Act instead of the question proposed by the learned Judicial Member: "Whether, on the facts and in the circumstances of the case and the directions given by the ITAT, Chandigarh Bench in its order dated 20-2-1996 in assessee s own case in I.T.A. No. 306/Chandi./91 for the assessment year 1988-89 for restoring th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss shown by assessee 36,142 1,58,347 Thus total addition on husking of paddy: 10,82,803 5. The Assessing Officer held that instead of above addition, he would make addition of Rs. 3,39,024 on account of suppressed yield with the following observations: "Thus, the total addition on account of suppressed yield in respect of rice, rice bran, phak and husk etc. comes to Rs. 10,82,803. Apparently part of this profit was ploughed back in the account books of the assessee in the garb of sale proceeds of paddy, as has been discussed in para 2 (page 5) above. The addition proposed in para 2 above at Rs. 7,43,779 is, therefore, deducted from this amount of Rs. 10,82,803 and only balance amount of Rs. 3,39,024 is added back in the total income of the assessee on this account." The Assessing Officer computed the assessee s income at Rs. 12,37,042 in the computation is as under: "Subject to the above discussion taxable income of the assessee is computed as under: Net Profit as declared: Rs. 60,320 Additions : ( i ) On account of bogus paddy sales as discussed in para 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is held to be non-genuine. Now the position is that as per the books of account, the assessee has shown sale of paddy amounting to Rs. 7,43,779, the department has not accepted such sale and has proceeded on the basis that such paddy would have been milled by the assessee and the products obtained must have been sold outside the books of account. The question, therefore, arises as to what should happen to the sale of paddy shown by the assessee, which has not been taken out for purpose of adjustment in the trading results. We, therefore, accept the alternative plea of the learned counsel of the assessee that only the resultant profit on account of milling should be added and since the matter has not been processed by the lower authorities on these lines, we restore the matter to the learned first appellate authority with the direction that he should ensure that while working out the total income of the assessee the addition of Rs. 7,43,779 is not made twice - one by way of sale of paddy shown by the assessee and second on account of sale of rice etc. on account of milling of the paddy valuing Rs. 7,43,779. " [Emphasis supplied]. The learned CIT(A) took up the case in the lig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to find myself in agreement with the findings as well as the conclusion to the effect that The appeal of the Revenue is dismissed , because, as discussed hereinafter, the matter remanded to the CIT(A), as per Para No.10 of the order of the Tribunal dated 20-2-1996 though of course was w.r.t. the issue relating to the double addition, if any, found to have been made by the Assessing Officer (equal to Rs. 7,43,779) on account of sale of rice (issue to be decided was that whether the addition made by considering the sale price of rice and other by-products obtained by milling the paddy (the paddy claimed to have been sold as it is but in fact was found to have not been sold), but the CIT(A), after having dealt with this issue, instead of stopping at the point of computation of additional business income at Rs. 92,163, exceeded in his jurisdiction vested as per the directions of the Tribunal and went on to observe that after adding the profit and the difference in purchase tax and the bardana account, addition upheld by the ITAT, the total income as per annexure A arrived at Rs. 1,57,780. The Assessing Officer will give effect to this order, accordingly. While doing so the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 representing credit of alleged bogus sales of paddy was confirmed by the Tribunal in the case of Ganesh Rice Mills ( supra ). 14. The learned JM reverts to the facts of present case from page 47 onwards of his order. The inference and conclusion drawn from the case of Ganesh Rice Mills ( supra ) are applied and it is observed that ITAT vide its order dated 20-2-1996 had confirmed addition of Rs. 7,43,779 under section 68/69A in this case. 15. After hearing the parties, the learned J.M. concluded as under: " 13. In view of above findings it becomes clear that the revenue s challenge to the action of the CIT(A) before us, therefore, is to be seen in the light of above facts which, admittedly, are undisputed and have become final because M/s. Ganesh Rice Mills did not appeal against the order of the Tribunal on the point of confirmation of addition under section 68/69A of the Act or against the directions given to the CIT(A) while setting aside the addition on account of total sale price of rice and other by-products obtained by milling the paddy (which was claimed by the assessee to have been sold, but was never sold). 14. In view of above facts and circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal under section 68/69A did not arise. 19. Before the Tribunal, the assessee had contended that even by sustaining addition of Rs. 7,43,779 as above there were two additions of the same amount. In this connection it was pleaded that sum of Rs. 7,43,779 already stood credited in the books of account and was thus disclosed income. The learned Members of the ITAT found force in above contention and specifically held that above amount of Rs. 7,43,779 should not be added twice over - once in the shape of sale of paddy shown by the assessee and other as resultant profit on account of milling of paddy. This is more than clear from the order of the Tribunal. In fact, the learned AM has emphasized the point by underlining portion of order of ITAT dated 20‑2‑1996. In other words, the Tribunal gave set off of Rs. 7,43,779 in the addition to be made for sale of rice and other products after milling of paddy shown to be sold as such in the books of the assessee. Only additional profit earned from milling of paddy was to be added. The profit from milling of paddy was rightly computed by the learned CIT(A) on the basis of earlier decisions of the Tribunal. There is no materi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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