9911796707
TMI Blog1989 (5) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... n addition of Rs. 1,89,000 was made by the ITO vide assessment order dt. 26th March, 1985 framed under s. 143/184(7) of the IT Act, 1961, with the following observations: ".........It has been stated that rice-bran obtained during the period from October, 1981 to March, 1982, included rice-bran obtained on account of milling done on behalf of DFSC and PUNSUP also but the assessee has failed to produce any evidence to prove that any paddy on behalf of DFSC and PUNSUP was milled during the period Oct., 1981 to March, 1982. Further a copy of milling account and rice-bran account furnished by the assessee (Annexure 'A') shows that rice-bran worth 3,199 qtls. has been shown obtained as result of paddy milling of 21,350 qtls. If the rice-bran had been obtained as a result of any other paddy milling, the account would not tally quantitatively. Vide order-sheet entry dt. 8th March, 1985, it was stated by the assessee that milling of paddy of DFSC and PUNSUP was done only during April to Sept., 1981. Under the circumstances, it is held that yield of rice-bran out of milling done on behalf of DFSC and PUNSUP has not been accounted for by the assessee properly. The difference in yield @ 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng stock of rice-bran has been valued by the assessee) comes to Rs. 25,140. It is, therefore, requested that addition of Rs. 25,140 may kindly be upheld." 4. The learned CIT(A) noticed that the factual position of husking of paddy of FCI had been admitted by the Department and that, if the yield of bran from the paddy was accounted for alongwith quantity of paddy husk, the yield would come to 3 per cent on the whole. It was also noticed that the ITO, after relying upon the certificate of DFSC authorities, was of the view that the bran yield could be 3.5 per cent of the paddy milled. In the above circumstances, there was noticed some sort of suppression of rice-bran to the extent of 0.5 per cent. Thus, the addition of 25,140 suggested by the ITO during the hearing of the first appeal, in place of the original addition of Rs. 1,89,000 made vide assessment order, was said to be relatable to the suppression of rice bran to the extent of 0.5 per cent. The CIT(A), however, considered that in the milling process no universal norm was set which could help to conclude that the yield could be only 3.5 per cent. According to him, the yield could be more and less also. According to him, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence. This factual position seems to have been incorporated in para 3 of the order under challenge. On behalf of the appellant, this factual position was shown to be neither in doubt nor in dispute. The addition was deleted taking into consideration the above position which is said to be existing in the assessee's case and on account of that, we are also satisfied that no addition was required to be made and much less to be sustained. Thus, agreeing with the reasons of learned CIT(A), we are clear that the situation does not warrant confirmation of any addition The finding under challenge is thus confirmed. 7. Another ground raised by the Revenue is against the deletion of the addition of Rs. 98,000 made by the ITO on account of sale price of rice husk. The assessee had shown yield of rice husked at 393 qtls. but no receipts were said to be there on account of its sale. The value was not said to had been accounted for in the closing stock. The assessee's case before the ITO was that the husk had no value. The assessee's contention was not found to be correct, and the learned ITO's enquiries were said to have revealed that the husk was sold at an average price of more than Rs. 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been accounted for. Generally the husk goes waste unless it is consumed in place of firewood by the factories. There is no evidence brought on record to say apart from the sale of Rs. 4,166. The appellant has sold the husk the sale proceeds of which have remained unaccounted. The addition appears to have been made on surmises and without material evidence. In view thereof, addition of Rs. 28,000 + Rs. 70,000 = Rs. 98,000 is deleted." 10. The present ground by the Revenue before us is against that finding. The learned Departmental Representative again supported the assessment order on the point. On the other hand, on behalf of the assessee, the learned advocate besides placing reliance on the findings under challenge, contended that the husk had no marketability and was by and large allowed to go waste or generally used in the assessee's dryer plant. According to the learned counsel, there was no basis for making any addition and that a wrong action was correctly vacated by the first appellate authority. 11. Submissions have been heard and considered. It was not seen to be in dispute that husk is produced when the rice is milled, no doubt, its quantity and that of price m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it proper to confirm a consolidated addition of Rs. 15,000 on account of possible disposal of husk by the assessee in the market. The finding under challenge is modified to this extent. 12. Next we take up the assessee's cross-objection No.18/Chandi/86. The assessee has objected to the confirmation of the disallowance of Rs. 7,550 said to have been paid by way of additional sales-tax demanded. In the assessment order, there is no worthwhile discussion on this issue and addition seems to have been made observing: "Payment of tax which is not allowed". 13. This observation was contested by the assessee and the learned CIT(A) refused to interfere observing that the amount paid for non-payment of tax was penalty which constituted infringement of law. The assessee has raised the present point against the said finding of the learned CIT(A). 14. The learned counsel for the assessee invited our attention to page 6 of the paper book, said to be a copy of sales-tax assessment order dt. 23rd Oct., 1981. According to the learned counsel, the assessee was required to make payment of Rs. 7,550 on account of additional sales-tax as some omission was said to have been committed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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