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TMI Blog1984 (5) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... relief of Rs. 28,189 instead of Rs. 24,799 as calculated earlier. The Tribunal held that apparently there had been a mistake of arithmetical calculation in respect of the reliefs allowed. Thus the figure of Rs. 24,799 was corrected by order dated March 15, 1976. While submitting the statement of case, the Tribunal has suggested that the figure to be considered in the question of law should now be Rs. 28,189 and not Rs. 24,799 as originally allowed. We accept the suggestion of the Tribunal and reframe the question as follows : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in giving a reduction of Rs. 28,189 in the cloth account of the assessee? The assessee is a partnership firm. The assessment year involved is 1968-69 with the year ending August 9, 1967, as the corresponding previous year. The assessee is a dealer in cloth and ready-made garments. The assessee admittedly maintained only one combined trading account for ready-made garments as well as other cloth. On a sale of Rs. 6,69,929 the assessee showed a gross profit of Rs. 82,849. The ITO found that the sales included the sale of ready-made garments to the tune of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f enhancement, he enhanced the addition made by the ITO from Rs. 6,151 to Rs. 42,646. It is pertinent to state here that the AAC enhanced the percentage to 17.2 (which was taken by the Tribunal as 17.5% by way of rounding off). Aggrieved by the above order of the AAC, the assessee went up in further appeal before the Tribunal. On behalf of the assessee, it was contended that the enhancement made in the ready-made garments account was not only uncalled for, but excessive. It was further contended that a portion only of the combined trading account could not be considered without referring to the whole account produced by the assessee and it was contended that the recasting of the ready-made garments account by the AAC had inevitable repercussions on the results of the other cloth account and the AAC should not have ignored that completely. In other words, it was contended that the addition to the profit and sales of the ready-made garments account was bound to result in a corresponding reduction in the sale and profit of the other cloth account as, admittedly, no suppression of sales was found by the Revenue authorities on the other cloth account. It was further contended on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d above, by miscellaneous application, brought to the notice of the Tribunal about the mistake of calculation which the Tribunal appreciated and held that there was a mistake of calculation and the sales on which the relief at 5% had to be calculated would be only Rs. 5,63,794 (Rs. 6,69,922 less Rs. 1,06,135) instead of Rs. 4,95,885, adopted in the Tribunal's original order and, therefore, the assessee was held to be entitled to a relief of Rs. 28,189 instead of Rs. 24,779 as calculated earlier. Thus, the figure was rectified under s. 154 of the Act. The learned senior standing counsel appearing for the Revenue has argued with all tenacity that the Tribunal was wrong in thinking that the AAC had made an addition in the gross profit in the other cloth account; on the contrary, the learned senior standing counsel submitted that the AAC had not touched the cloth account at all and the AAC had taken only the closing stock of garments which was the opening stock in the subsequent year as shown by the assessee himself. The learned senior standing counsel has submitted that it was erroneous on the part of the Tribunal to hold that the AAC had made any addition on the cloth account. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en sold but remained part of the unsold stock of the assessee's business at the end of the accounting year. The whole of the profits of that year must be taken to have accrued or arisen at Calcutta where the business was carried on since it was still in the stock in the hands of the assessees and no part of that business admittedly had been transacted at Bikaner. Thus, the Supreme Court held that the sum of Rs. 2,20,887 was very correctly held to be assessable to tax. From the facts of the case relied upon by the learned senior standing counsel for the Revenue, it is obvious that the facts there were absolutely different, the point to be decided was absolutely different and hence, in my opinion, the learned senior standing counsel, though has relied upon this case with some tenacity, is completely under a misconception. In the instant case, the ITO did not disbelieve the gross profits at Rs. 82,849 (inclusive of both the items, i.e., ready-made garments and the cloth account) and fixed the margin of profit at the rate of 12 1/2.% on the cloth account. The AAC held that there was suppression of sales so far as ready-made garments were concerned, but accepted the closing stock an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the tenacity of the learned senior standing counsel for the Revenue, I wish to highlight the main point involved in this case. The decision of the Supreme Court in Chainrup Sampatram v. CIT [1953] 24 ITR 481, referred to by my learned brother, was laying down a principle of law, namely, as to whether the silver bars in which the assessee of Calcutta in that case was dealing lying in Bikaner and not transacted upon in any manner still formed a part of the stock-in-trade and was liable to tax. On the contrary, in the case in hand, it is a mere quantification of the correct figure to be arrived at in the process of arithmetical calculation or computation. It involves no question of law at all. Since, however, the question as framed by this court calling for a reference under s. 256(2) of the Act has a larger ambit, it has necessitated us to go into the facts for the purpose of finding out as to whether, on the facts and in the circumstances of this case, the Tribunal was right in its computation of the amount of deduction to be allowed to the asses see. There lies the whole difference between the decision of the Supreme Court and the instant case. - - TaxTMI - TMITax - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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