M/S Victory Mills v. Commissioner Of Income-Tax, Patiala

Income-tax Appeal No. 260 of 2004 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH Income-tax Appeal No.260of 2004 Date of decision: 13.12.2010 M/s Victory Mills ...Appellant Versus Commissioner of Income-Tax, Patiala ...Respondent CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY KUMAR MITTAL Present: Mr. Pankaj Jain, Advocate for the appellant. Mr. Tejinder K. Joshi, Advocate for the respondent. **** ADARSH KUMAR GOEL, J (Oral). This appeal has been preferred under Section 260A ofIncome Tax Act, 1961 (hereinafter referred to as 'the Act”) proposingfollowing substantial question of law arising out of order dated17.2.2004 of the Income Tax Appellate Tribunal, Chandigarh Bench(hereinafter referred to as “the Tribunal”) passed in ITANo.155/Chandi/99 in respect of assessment year 1995-96:- “Whether under the facts and circumstances of the case,the Tribunal was justified in reversing the findings of theCommissioner of Income Tax (Appeals) who had deletedthe addition of Rs.1,49,557/- made by AssessingAuthority which was based on no evidence or material to prove any excess price as alleged was charged by theappellant for recorded sales and hence the findings ofTribunal are perverse?” As a result of search on the business premises of M/sPartap Bhangu Solvex (P) Ltd., village Pasiana, a diary showingunaccounted purchases from various concerns, including theassessee was seized. On being confronted with the said material,the assessee surrendered unaccounted income of Rs. 4 Lacs.During the assessment the assessing officer made additions to thedeclared income holding that the assessee had under-billedtransactions and its books of account were not reliable. Theaddition represented difference in declared sale price and the actualsale price. The CIT(A) set aside the additions but the Tribunalrestored the same. Dispute surviving in this appeal relates toaddition of Rs.1,49,557/-. In this regard, the Tribunal observed:- “As regards allowing a relief of Rs.1,49,557/- on accountof understatement of sale proceeds of rice bran, we findthat the assessee has been understanding the saleconsideration. This fact is admitted by the ld. CIT(A)himself. In fact, the details recorded in the seized diaryindicated that the assessee and its sister concern hadsold rice bran @ Rs.330 per qtl. The issue is aboutestimation of understatement of sale proceeds on thesale of rice bran. Similar issue came before us in the case of ITO V Sachdeva Traders, Rajpura in ITANo.32/Chandi/99 for assessment year 1995-96 which washeard on 4.4.03 and decided on 6.4.03. We find that thesame ld. CIT(A) has upheld the addition by applying salerate of Rs.330 per qtl. by referring to the cases of SunilTraders, Rajpura, S.K.Traders and Shakti Traders. Wehave already upheld the order of ld. CIT(A) in applying arate of Rs.330. Therefore, we do not find any justificationof applying a lower rate than wheat was applied in thecase of Sachdeva Traders. Respectfully following ourorder dated 6.4.03 in the case of ITO V. SachdevaTraders for assessment year 1995-96, we are of theopinion that the ld. CIT(A) was not justified in allowingrelief on this ground. We set aside the order of ld. CIT(A)and restore that of the AO. This ground of appeal isallowed”. We have heard learned counsel for the parties. Learned counsel for the assessee submitted that it couldnot be presumed that sale consideration in seized diary was correctone. We are unable to accept the submission. A perusal of theabove findings shows that the sale price of rice bran recorded in thebooks of account was not found to be genuine and actual sale pricewas found to be higher which rate was also adopted in another casementioned therein. The issue is in the realm of appreciation of We have heard learned counsel for the parties. Learned counsel for the assessee submitted that it couldnot be presumed that sale consideration in seized diary was correctone. We are unable to accept the submission. A perusal of theabove findings shows that the sale price of rice bran recorded in thebooks of account was not found to be genuine and actual sale pricewas found to be higher which rate was also adopted in another casementioned therein. The issue is in the realm of appreciation of evidence. The entry and the books of account of the assesseebeing not reliable, assessment had to be made on estimation. Inabsence of perversity, the finding recorded by the Tribunal has to beupheld. In view of the aforesaid, question raised is answeredagainst the assessee. Accordingly, the appeal is dismissed. (Adarsh Kumar Goel) Judge December 13,2010Pka (Ajay Kumar Mittal) Judge