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TMI Blog2003 (11) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... to the appellant, the order of the Tribunal involves the following substantial questions of law: "1. Whether the order of the learned Income-tax Appellate Tribunal deleting the addition of Rs. 1,35,80,987 is perverse and contrary to the evidence and tax audit report of the statutory auditors? 2. Whether the learned Income-tax Appellate Tribunal has ignored the reasoning of the Assessing Officer and the tax audit report which does not mention any shortage of supari and catechu and was right in drawing distinction between shortage and wastage to delete the addition made by the assessee? 3. The hon'ble court may be pleased to amend and modify the questions of law suggested above and/or formulate new/additional questions of law?" Briefly s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Commissioner of Income-tax (Appeals). Though the Commissioner agreed with the Assessing Officer in principle, taking into consideration the cost price of the supari and the explanation of the assessee that the wastage in catechu account took place in grinding and it was claimed only at 2.72 per cent, as compared to earlier years, where the wastage was much higher, the Commissioner restricted the addition to Rs. 40,51,638 on account of shortage of raw supari. Thus, the assessee got a relief of Rs. 95,29,349. Not being satisfied with the order of the Commissioner, the assessee as well as the Revenue carried the matter in further appeal to the Tribunal. By the impugned order, the Tribunal has deleted the entire addition made by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it in the earlier so many years have been allowed by the Assessing Officer. We, therefore, hold that the partial addition sustained by the Commissioner of Income-tax (Appeals) is not justified and the same is deleted. In view of our findings, the Revenue's ground of appeal on this issue is also dismissed." Assailing the order passed by the Tribunal, Mr. Sanjiv Khanna, learned senior standing counsel for the Revenue, has submitted that the Tribunal has failed to appreciate that the stand of the assessee was contrary to the tax audit report, which is to be accepted as reflecting the correct state of affairs of the assessee. It is also urged that the Tribunal has laid too much emphasis on the word, "shortage" and "wastage", which was only an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ari v. Purushottam Tiwari [2001] 251 ITR 84 (SC), while dealing with an analogous provision contained in section 100 of the Code of Civil Procedure, their Lordships of the Supreme Court have observed that to determine whether a question of law raised in a case is a "substantial question of law", the tests laid down by the Constitution Bench in Chunilal V. Mehta and Sons Ltd. (Sir) v. Century Spinning and Manufacturing Company Ltd., AIR 1962 SC 1314, still hold good. The five tests so laid are: whether (i) it is of general public importance; or (ii) it directly or substantially affects the rights of the parties; or (iii) it is an open question in the sense that it is not finally settled by the Supreme Court; or (iv) it is not free from diffi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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