INCOME TAX OFFICER Vs. ASHOKA BISCUIT WORKS

JUDGEMENT

(1.) These two appeals in Criminal Appeals Nos. 779 of 1992 and 780 of 1992 are filed by the Income-tax Officer, E-Ward, Circle-II, Hyderabad, against the judgments in C.C. No. 128 of 1986 and C.C. No. 127 of 1986 on the file of the Special Judge for Economic Offences, Hyderabad, respectively, acquitting the respondents-accused of offences under section 276C and 277 of the Income-tax Act, 1961, and sections 193 and 196 of the Indian Penal Code, by separate judgments dated 31/10/1991. As the dispute in respect of these two appeals is identical they are being disposed of by this common judgment.

(2.) The facts of the case as emerging from the evidence of witnesses adduced during the trial can briefly be stated as follows : The R-1 firm was carrying on business in manufacture and sale of biscuits. The biscuits are supplied on sale and return basis to the commission agents. The value of stocks supplied cannot be treated as sold out, unless the commission agents informed the sale and sent the statements. The entries in the accounts were made only after the sales statements were received from the commission agents. The R-1 firm filed its return of income on 14/10/1977, and 21/11/1978, declaring the total taxable incomes at Rs. 2,14,014 and Rs. 3,43,027 for the assessment years 1977-78 and 1978-79, respectively.

(3.) While working out the taxable income, the firm omitted to take into account the sales made through the commission agents during the last quarter of the years 1977 and 1978 in the assessment years 1977-78 and 1978-79, respectively. Thus, an amount of Rs. 7,79,796 being amount of sales during February and March, 1977, which ought to have been included in the returns for the assessment year 1976-77 are not included in that year but are included in the returns for the assessment year 1977-78. Similarly, sales to the tune of Rs. 7,17,059 effected in March, 1978, which ought to have been shown in the returns for 1977-78 are shown in 1978-79. Thus, by following this mistaken system of recording the commission sales on the day of receipt of the sale statement, the consignment sales pertaining to the year 1977-78 were accounted for in the year 1978-79 and the consignment sales pertaining to the year 1978-79 were recorded in the books of account of the year 1979-80.