9911796707
TMI Blog1983 (2) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... an income of Rs. 85,909, along with the statement of accounts like trading accounts (i.e., malkhata, wooltops account, woollen yarn account, colour account), profit and loss account and balance-sheets. This return was filed by Sawan Mal, partner, in the prescribed manner. Later on, the respondents filed details of colour and chemicals purchased, consumed and sold on 9th July, 1968, as Rs. 11,232.04, Rs. 6,124.04 and Rs. 5,097.60, respectively. The Income-tax Department found that the aforesaid details were inflated ones and that the respondents as assessee had not shown as to what happened to the imported dyes and colours purchased by them for Rs. 4,530. The respondents had stated that those were used in the manufacture of cotton hosiery goods and that the same had been supplied to the fabricators who dyed and fabricated cotton hosiery goods for the respondents. One of such fabricators was mentioned as M/s. Maghera Knitting Works, whose proprietor, Dalip Singh, was summoned and examined by the income-tax authorities. Dalip, Singh, however, denied, having received the dyes and colours from the respondents. The respondents further showed sale of imported dyes and colours to a firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Kanpur, and P.W. 8, V. N. Jajoo, general manager of Dhariwal Mills, in support of its case. At the trial, the respondents denied the prosecution allegations and gave their own explanation of the account and also produced in their defence Gurcharan Singh, D.W. 1, D. S. Joshi, special assistant, United Commercial Bank, as D. W. 2, Kishori Lal Sharma of the I. T. Office, Panipat, as D.W. 3, Raghabji of Azad Shipping Agency, Bombay, as D.W. 4, Pawan Kumar, clearing agent of railway station, Ludhiana, as D.W. 5, Tirath Dass, ex-broker in wooltops business, as D.W. 6, Thakar Dass as D.W. 7 and also got re-examined R. N. Bhagat (P.W. 2). The case of the respondents is that the respondents had a settlement of fabrication of hosiery goods with Dalip Singh (P. W. 6) that if the firm, M/s. Variety Hosiery Mills, provided colours, then the charges would be lesser, otherwise Dalip Singh would charge Rs. 20 per dozen and that the disputed dyes/colours were purchased by the respondent-firm against the import licence from M/s. Volkart Brothers, Switzerland (hereinafter referred to as " the Swiss firm)", the payment having been made through the United Commercial Bank, the goods having been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho stated that the respondents for the purposes of assessment had furnished details of colour imported against import licences during the relevant year and he issued notice under s. 143(3) of the Act and asked the respondents to furnish details of dyes/chemicals imported or sales/consumption thereof during the relevant period. The respondents-firm thus filed the requisite details and showed the total purchases as Rs. 11,232.04 and the sale as Rs. 5,097.60 leaving the balance value of the colour in the malkhata as Rs. 6,124.44. This balance was shown to have been consumed by the respondents-firm itself. As regards the colour sale worth Rs. 5,097.60, Shri Nanda found that the books of the respondents-firm showed that dyes had been sold to M/s. Dina Nath and Sons, Amritsar, on 24th February, 1965, for Rs. 5,098. However, during the assessment proceedings, Shri Nanda received secret information that the respondents-firm had sold two drums of dyes and chemicals, which were imported into India by it, to Dhariwal Mills and not to M/s. Dina Nath and Sons, Amritsar, as shown in the books of account and that the sale in favour of Dhariwal Mills was made by the respondents-firm through two bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt Co. under goods receipt No. 20334, dated 8th February, 1965, Dhariwal firm asked the ITO to write to M/s Ajay Textiles for further information. Shri Bhagat could have collected the relevant record but he had not done so even when admittedly Tilak Raj of Ajay Textiles had stated before him, in his cross-examination, that it was not he but his partner, Sat Pal, who along with Manohar Lal, son of Dina Nath, bad come to Ludhiana and after making payment of Rs. 3,615.60, had taken delivery of two drums of dyes and chemicals from the respondents-firm and this amount of Rs. 3,615.60 had been shown in the cash book of M/s. Ajay Textiles as having been withdrawn on 8th February, 1965, and given to Manohar Lal, son of Dina Nath of M/s. Dina Nath and Sons, Amritsar. Thus, Shri Bhagat himself admits that he had come to know that the transaction was conducted by Manohar Lal, son of Dina Nath, and Sat Pal of M/s Ajay Textiles. As observed earlier, Manohar Lal and Sat Pal were not examined. Tilak Raj of M/s. Ajay Textiles, Amritsar, has been examined as P.W. 4. He stated that in July, 1964, he had purchased the import licences which were in the name of the respondents-firm for Dhariwal Mill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mar, who is a clearing agent at the goods office, railway station, Ludhiana. According to him, on 30th January, 1965, he had cleared the goods and delivered the same to the respondents-firm. P.W. 8, Shri V. N. Jajoo, the general manager of the Dhariwal Mills, was examined to prove letters, Ex. PW-8/A and PW-8/B. He admitted that he had no knowledge as to how, by whom, and where the import duty on these goods was paid nor had he knowledge as to who got the goods released from the Customs authorities. He deposed that he had not looked into the records from this angle and that he had looked into the records only to the extent of enquiries made by the ITO. Thus, in our view, the trial Magistrate, after considering the whole evidence, has rightly observed that it is not proved that the respondents had not sold their goods to M/s. Dina Nath and Sons as stated in their income-tax statement. Regarding the balance of Rs. 6,124.44, which is shown to have been consumed by the respondents-firm itself, that has also been proved by the defence evidence and the prosecution has failed to prove that this was not used by them. The prosecution tried to prove this charge through Shri Dalip Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eces and he was charging Rs.10 or Rs.11 per dozen for the normal sizes and Rs. 5 to Rs. 6 per dozen for small sizes and something more for the middle sizes. He also stated that during this period, he was fabricating the goods of M/s. Kishore Hosiery Mills also and that this firm had also placed orders for thousands of dozens of pieces for fabrication, yet he was charging Rs. 14 per dozen for the normal sizes from them and similarly proportionately less amount for the lesser sizes. He, however, denied that this difference of rates was due to the fact that the respondents supplied him dyes while Kishore Hosiery Mills did not do so. In reply to the question in re-examination conducted on behalf of the Department itself, the witness states that he cannot explain the difference in charging the rates from the respondents-firm and the other parties. Thus, it cannot be understood as to why Dalip Singh, PW, 6, was charging lower rates from the respondents-firm for the same items for fabrication than from the other firms. In this matter, the respondents examined Gurcharan Singh as D.W. I and Thakar Dass as D.W. 7 to support their defence version that lower charges were paid to Maghera Knitti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termediary for the respondents-firm, then there would have been more transactions and not only two. It seems to be a concern of Kanpur people, because there were more transactions between the Panipat and Kanpur concerns for the year ending 1964. Shri S. K. Shukla (P.W. 7), an accountant of the Kanpur concern, admitted that the invoice dated 6th August, 1964, of the Panipat concern was not traceable in their records. The original invoice was thus missing. He had produced Ex. PW-7/B, a copy of the ledger of the Panipat concern, but he admitted that Ex. PW-7/B had not been compared by him with the originals. He also stated that his firm had no dealings with the respondents-firm at Ludhiana.. On the other hand, he asserts that his firm had paid over seven lakhs to the Panipat firm in 1964 and that they did not pay any sum in cash to that firm out of this huge payment of Rs. 7 lakhs. According to him, the amounts were paid by bank drafts, telegraphic transfers and by cheques through banks. Shri V. N. Jajoo (P.W. 8) admitted even if the goods came earlier, the bill can come later on and that it was not necessary that although the bill through which the sale was made of the wooltops by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
