INCOME TAX OFFICER Vs. K AMBAJI RAO

JUDGEMENT

(1.) WE have heard learned senior counsel who has also produced certain additional material. His principal submission is that irrespective of the quality of the order passed by the Tribunal in this case the interference by the Tribunal was perfectly legitimate. If learned senior counsel was right in his argument then the necessary sequitur would be that no interference would have been called for by the High Court and it was for this reason that we have heard him and the appellant's learned counsel for some time.

(2.) HAVING heard the two learned counsel both on the earlier date of hearing as also today, and having considered the additional material that has been produced, we are of the view that there is really no warrant to go through the two-stage procedure of admitting the appeal and thereafter setting it down for hearing separately. In our considered view, the reasons given by the assessing authority were perfectly justified for purposes of disallowing the plea put forward by the assessee. In the first instance the assessee was required to account for the additional quantity of grain that was supplied to the solvent company and the explanation put forward was that it was purchased from 25 agriculturists. The Income-tax Officer has taken the trouble of serving summons on all the 25 of them and the result was that 23 of them could not be traced and the remaining two to whom summons were served did not appear. In fact, the postal endorsement as far as the 23 so called purchasers were concerned was to the effect that there was no such addressee. It is true that Mr. Sarangan did mention to us that these are agriculturists who have sold the paddy to the assessees and that when a registered letter goes through the postal department, that too after a considerable lapse of time, there is every possibility that if they are not readily available at the village the endorsement of the aforesaid type would be received. We are not on the status of the persons concerned but more importantly in our considered view where the Department had seriously doubted the genuineness of the purchase the onus lay on the assessee to substantiate the same and it would not have been difficult for the assessee to have produced at least some of the persons from whom the alleged purchases were made ; coupled with the fact that there are absolutely no records maintained to substantiate the purchase and the contention that the transactions were cash transactions, does lend a level of doubt to the genuineness of the explanation. We then find that the Income-tax Officer has also taken the trouble to verify from the consumption of the electricity that there has been substantial increase in this head. The explanation of the assessee is that the machinery is old and that therefore the consumption has gone up and that the rates have also increased. This explanation is not good enough considering the fact that the increase is very substantial and secondly since it more or less falls in line with the Department's theory that it was because of the additional quantity and the hulling that the consumption of electricity had increased. HAVING reviewed all these factors, we are of the confirmed opinion that this was not a case in which interference was called for by the Tribunal. The ground on which the Tribunal has interfered, that too with a well considered decision, are in our view hardly satisfactory or plausible. It is incumbent upon the authority which interferes with a well considered or well reasoned order and substitutes it with a contrary one, to fully justify the grounds on which the interference is called for and to independently justify the new conclusions that have been recorded. Neither of these has been done. The reasons mentioned in the works order are relatively weak and perfunctory. HAVING regard to this position we have no option except to set aside the Tribunal's order and restore the earlier assessment order.