9911796707
TMI Blog1997 (5) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... 91, which was communicated to the petitioner, vide diary No. 30, dated June 3, 1991. Hence, this application under section 256(2) of the Income-tax Act, 1961. The case of the petitioner, inter alia, is that during the course of assessment proceedings for the year 1980-81 the assessing authority found that the rate for supply of country liquor to the Government for the period July 1, 1978, to June 30, 1979, was Rs. 1.24 per litre. The assessee, Ganganagar Sugar Mills Ltd. which was a Government company, claimed that the Government has allowed the payment at the rate of Re. 1 per litre only. On going through the accounts, the assessing authority found that the amount of Rs. 1.24 was bifurcated and the amount of Re. 1 per litre was paid by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31 lakhs of L. P. L. of country liquor to the Government licensees. The actual cost of production for this country liquor on the basis of actual expenditure incurred on purchase of material, labour wages during the period July 1, 1978, to June 30, 1979, comes to Rs. 1.58 per L. P. L. whereas the Government had allowed the rate of Rs. 1.24 (actual rate allowed Re. 1 and 0.24 paisa was given in the form of share capital). Thus in fact the company has been put to a loss of Rs. 33 lakhs (calculated at the rate of Rs. 1.58 (--) Rs. 1.24 = 34 paisa for 97-31 lakhs L.P. L.). We may, therefore, request the Government to reimburse the loss of Rs. 33 lakhs." The Financial Controller also prepared a brief in support of his note, dated January 2, 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made liquor. The assessee was directed to produce the complete record relating to fixation of the issue price for the assessment years 1976-77 to 1979-80 on March 2, 1983. On March 3, 1983, it was found that one of the files which were produced on March 2, 1983, was not produced and, therefore, the rest of the files were impounded by the assessing authority on March 3, 1983, after recording the reasons. The assessee preferred an appeal to the Commissioner of Income-tax (Appeals) and the said addition was upheld as per order of the appellate authority. The assessee preferred an appeal before the Tribunal, which held that the price was fixed at Re. 1 per litre. It, accordingly, directed the Department to bring the relevant material or the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng questions of law : "1. Whether, on the facts and in the circumstances of the case and in law, the Tribunal was right in deleting the addition of Rs. 24 lakhs made by the Assessing Officer as undisclosed sale proceeds of country made liquor ? 2. Whether, on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that note of the Financial Controller was not sufficient to hold that the reduction in rate was meant to avoid income-tax notwithstanding that the Assessing Officer had incorporated in the assessment order excerpts from correspondence between the company's officials and the State Government and notes of the company's officials on its records which provided positive evidence regarding manouv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal wrongly directed the Revenue to produce a copy of the file and notes which were in the possession of the assessee and that apart, the Tribunal has ignored the material evidence duly recorded in the assessment records. The Tribunal also ignored the fact that the assessee deliberately withheld the file on March 3, 1983, which was produced on March 2, 1983, and, therefore, the assessing authority was forced to impound the record of the company. It was the duty of the assessee to produce the documents from which it could be proved that the amount of Rs. 24 lakhs was not received by the assessee-company. Last but not least, it was contended that the order of the Tribunal was based on surmises and conjectures and material evidence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tail trade of country liquor shops at Jaipur, Kota and Alwar, amounting to Rs. 1 crore. That really formed the main substratum of the order for the Inspecting Assistant Commissioner (Assessment), so as to form a view that the reduction of rate from Rs. 1.24 per litre to Re. 1 per litre has only been done for the purpose of evading income-tax. However, the Tribunal found that the note of the Financial Controller was not by itself sufficient to support the addition in the total assessment specially when the assessee was itself a Government company and where no question of personal taxes was involved. Considering the profits earned by the assessee with the help of the State Government from the three country liquor shops at three different plac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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