ADDITIONAL COMMISSIONER OF INCOME TAX Vs. BHANWARLAL SOHANLAL

JUDGEMENT

(1.) THIS is an application under Section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") on behalf of the Additional Commissioner of Income-tax, Rajasthan, Jaipur, praying that the Appellate Tribunal be directed to state the case and refer a question of law arising therefrom.

(2.) FACTS which are necessary for the disposal of this case may be stated in brief, Messrs. Bhanwarlal Sohanlal, the assessee, is a partnership firm registered under the Indian Partnership Act. The assessee is a dealer in various grains. It filed return of income for the assessment year 1966-67. Along with its return a summarised trading account was also filed. According to the statement of trading account, the assessee, claimed shortage of 1,017 Kgs. in maize, 2,117 Kgs. in gram and 13,746 Kgs. in jowar on account of driage, handling and storage, etc., during the year of account-The shortage claimed by the assessee on the basis of the statements furnished by it was found to be reasonable by the Income-tax Officer and the same was allowed by him while passing the order of assessment for the year in question. However, on examining the books of account of the assessee, the Income-tax Officer found that the assessee had manipulated quantitative details in the books of account by making wrong and reduced details of purchase by making overwriting in the figures of the entries in its books of account. On the basis of correct details the Income-tax Officer found that 30,041 Kgs. of maize, 10,000 Kgs. of gram and 40,100 Kgs. of jowar were sold by the assessee without showing the sale proceeds thereof in its books of account. Accordingly, he valued these quantities and made an addition of Rs. 45,000 as the sale price of detected quantities of grains to the business income of the assessee as concealed income.

(3.) ADMISSION of the assessee made in the books of account, therefore, could not be taken as a safe basis for arriving at the correct quantum of shortage. The Tribunal has relied upon the Government notification for arriving at the permitted percentage of shortage. The notification was placed before the Tribunal on behalf of the assessee and it has not been challenged that the percentage of the shortage permitted in the notification is in any way unreasonable. Under the notification certain percentage of shortage has been allowed by the Government of Rajasthan to the co-operative societies through whom the Government has been selling large quantities of grains in Rajasthan. It has, however, been contended by the learned counsel for the department that the percentage of shortage permitted by the notification does not cover the assessee's case as the assessee was carrying on sales from month to month. The Tribunal has given due regard to this fact and has reduced the percentage in the case of the assessee having regard to the shorter period by taking out proportionate average of shortage. In the circumstances it cannot be said that the decision of the Tribunal is such as no reasonable man could have arrived at. When the Tribunal has relied upon the notification of the Government of Rajasthan, which was relevant on the point, the contention put forward by the department that there was no evidence, cannot also be sustained. The basis adopted by the Tribunal appears to us to be a reasonable one and we do not see any justification to differ from it. In view of what we have said above, we are of the opinion that no question of law arises out of the order of the Tribunal.