9911796707
TMI Blog1985 (8) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... o the purchase of 300 bags of sugar in cash and subsequent sale of 100 bags to her husband Shri V. P. Didwania. It was further stated in the above letter that these additions have been made to the business income of the assessee to purchase peace on the basis of discussions made with the ITO. Besides these another addition of Rs. 21,090 was also made to the declared income on account of interest. We will have occasion to deal with these items a little later in our this order. 3. During the course of the assessment proceedings, the ITO found that the assessee had made purchases of 300 bags of sugar on 8th Jun, 1972 for a sum of Rs. 108,000. In reply to the query made by the ITO, it was submitted by the assessee that she had made purchases of the above 300 bags of sugar from 75 parties in cash and none of transaction was of more than Rs. 2,500. In support of this contention, the assessee produced before the ITO a Roznamcha. This Roznamcha gave the details of 75 different purchases. Of these 73 related to the purchase made by the assessee from her husband Shri V. P. Didwania. This related to 290 bags for a sum of Rs. 104,000. The other purchases of 10 bags were from two other partie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The ITO, therefore, made a further addition of Rs. 1,800. 6. The ITO further found that while the assessee had sold sugar to an outside party at the rate of Rs. 372 per bag, she had sold 200 bags to Shri V. P. Didwania at the rate of Rs. 311. He did not accept that the sugar sold to Shri Didwanin was damaged. He was of the opinion that the assessee had suppressed its profit to the extent of Rs. 12,200. As against this, the assessee had already included Rs. 3,000 in her returned income. The ITO, therefore, made a further addition of Rs. 9,200. 7. It was further found by the ITO that the assessee had advanced huge amount to M/s Vishwanath & Co. On this advance interest had been charged in 1971-72 and 1972-73. No interest was charged in the year under appeal. It was submitted before the ITO that since the account with the above party was closed during the middle of the year, there was no question of charging any interest. However, during the course of the discussion, the assessee agreed that a sum of Rs. 21,090 be included in her income. It was this amount, which was also included by her in her returned income. The ITO, thus brought to tax this amount also. 8. It will be pertin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. It was next contended before the CIT (A) that there were, in fact, no, purchases in cash, it was pointed out to him that the assessee did not have any cash in her possession and the sum of Rs. 1,04,000 was provided by the husband himself, which amount was utilised by the assessee for making the purchases. It was finally submitted before him that once the ITO had applied the provisions of s. 145 of the Act, he could not again apply s. 40A (3). 12. The above submissions were dealt with by the CIT (A) in great detail. He did not accept the assessee's claim that there were no cash transactions, but the transactions were, in fact, on credit. He came to this conclusion on the basis of a report from the ITO called for fly his predecessor. In this report, the ITO had stated that Rs. 1,04,000 were withdrawn form the cash book of Shri Didwania in the name of Ms. Asha Traders on 8th Jun, 1972 of which the assessee was the proprietor. The extract form the cash book further showed a withdrawal of Rs. 77,000 from Central Bank Kanpur on the same date. According to the CIT (A) this went to show that the assessee had cash of Rs. 104,000 for making the purchases. He, however, accepted the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us. In our opinion, there is no force in the assessee's appeal. We agree with the Department that the return filed on 28th May, 1975 was one under s. 139(4) of the Act. Sec. 139(4) states that if any person has not furnished a return within the time allowed to him under sub-s. (1) or sub-s. (2), may, before the assessment is made, furnish the return for any previous year at any time before the end of the period specified in the said sub-section. We have already stated above that the assessee had not filed any return under s. 139 (1). He had also not complied to the notice issued by the ITO under s. 139(2). This notice was issued on 19th Oct., 1973 and was served on the assessee on 22nd Oct., 1973. The return was filed long thereafter on 28th May, 1975. The return filed on the latter date could therefore, be treated only as a return under s. 139(4). The Allahabad High Court in the case of Dr. S. B. Bharagava vs. CIT (1982) 30 CTR (All) 260 : (1982) 136 ITR 559 (All) has held that a return under s. (4) of s. 139 stood in a category different from that provided sub-s. (4) or sub-s. (2) and such a return cannot be revised under sub-s. (5). The revised return being an invalid return, ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had also taken a plea before the CIT (A) that purchases were not included in item "expenditure". He argued that this plea no longer was acceptable in view of the decision of Allahabad High Court in the case of U. P. Hardware Store vs. CIT (1976) 104 ITR 664 (All) and several other decision delivered subsequently. His next contention was that the CIT (A) had erred in accepting the genuineness of the Roznamcha. He, argued that if the Roznamcha really existed, there was no reason why it could not be found in the search and since it was not so found, the only conclusion was that it did not exist and was subsequently prepared. In this connection, he also referred to the entry in the fair cash book and submitted that there was only one entry for the purchase of 300 bags for a sum of Rs. 108,000. He submitted that since this purchase was in cash, the assessee had violated the provision of s. 40(3) of the Act. He also submitted that the assessee had failed to show any circumstances so as to bring her case within the ambit of r. 6DD (j) of the IT Rules. 1962. 21. The ld. counsel for the assessee, on the other hand, placed before us several main and alternate contentions. His firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts were subsequently shown as pied back to Shri Didwania for the purchase of 290 bags of sugar at the rate of Rs. 360 per bag. We have also seen that the authorities below had doubted the above purchase and had made disallowance of Rs. 18,000 at the rate of Rs. 60 per bag for the entire 300 bags on the ground that the purchases had been inflated by the assessee. We also find that the assessee's husband had made a disclosure on 31st Dec., 1975 in regard to the asst. yr. 1971-72 The disclosure petition dt. 31st Dec., 1975 reads as under: "That the excess sales of sugar of 305 bags although shown as sales remained in stock all along with the petitioner in subsequent years also when alternatively the same was sold in many small lots to M/s Asha Traders on 8th Jun, 1972. Out of the sales proceeds of the sugar a sum of Rs. 30,000 was subsequently deposited with M/s Sekasari Sugar Mills (P) Ltd. in the name of M/s Vshwanth & Co. and the balance amounts remained invested in the business." the assessment was also made for the above assessment year on 20th Feb., 1981 including a sum of Rs. 51,850. These facts were also brought to our notice by the ld. counsel for the assessee. From thes ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
