Punjab-Haryana High Court
Parkas Chand Karori Mal vs Commissioner Income Tax on 30 January, 2024
Author: G.S. Sandhawalia
Bench: G.S. Sandhawalia
Neutral Citation No:=2024:PHHC:012389-DB
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
Neutral Citation No.2024:PHHC:012389-DB
(202) ITA No.92 of 2003
Parkash Chand Karori Mal, Kapurthala
......Appellant
Versus
Commissioner Income Tax, Jalandhar and another
......Respondents
(2) ITA No.89 of 2003
M/s Anand Rice Trading Co.
......Appellant
Versus
Commissioner Income Tax, Jalandhar and another
......Respondents
(3) ITA No.90 of 2003
M/s Aggarwal Rice Mills
......Appellant
Versus
Commissioner Income Tax, Jalandhar and another
......Respondents
(4) ITA No.91 of 2003
M/s Aggarwal Rice Mills
......Appellant
Versus
Commissioner Income Tax, Jalandhar and another
......Respondents
Decided on : 30.01.2024
CORAM : HON'BLE MR.JUSTICE G.S. SANDHAWALIA
HON'BLE MS.JUSTICE LAPITA BANERJI
Present: Mr. Alok Mittal, Advocate for the appellants.
Ms. Gauri Neo Rampal Opal, Senior Standing Counsel
for the respondents.
*****
G.S. Sandhawalia, J. (Oral)
The present judgment shall dispose of four appeals i.e. ITA
Nos.92, 89, 90 & 91 of 2003. Facts are being taken from ITA No.92 of
2003 'Parkash Chand Karori Mal Vs. Commissioner Income Tax,
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Neutral Citation No:=2024:PHHC:012389-DB
ITA Nos.92, 89, 90 & 91 of 2003
Jalandhar and another', which has been filed under Section 260A of the
Income Tax Act, 1961 (for short 'the Act') against the order dated
09.01.2003 passed in ITA No.246 (ASR)/2002 for the Assessment Year
1998-1999.
2. The only substantial question which is sought to be raised
reads as under:-
"7 (c) Whether in the facts and circumstances the Annexure
P/1 and P/3 are untenable in law in as much as the lower
authorities committed an error in not accepting the audited
book results based on books account maintained in the
normal course of business as the business of the appellant
firm is inspected by other Department-such as Sales Tax
Department and Department of Market Committee and
furthermore whether the action of the respondent is arbitrary
as the books of account have not been rejected and the
relevant authorities have not taken recourse to Section 145
while fixing the percentage?
3. A perusal of the assessment order dated 19.03.2001
(Annexure P-1) would go on to show that the return for the assessment
year 1998-1999 had been filed on 30.09.1998 declaring an income of
`9,160/-. The same was processed under Section 143(1)(a) of the Act on
10.10.2000 and the case was selected for scrutiny with the prior approval
of Joint Commissioner of Income Tax, Range-2, Jalandhar. Notices under
Section 142(1) and 143(2) of the Act were accordingly issued. It is the
case of the appellant that books of accounts and the information as called
for had been furnished and examined. The assessing authority had
noticed that 77869 qtls. paddy had been processed and phoos worth of
Rs.6,62,214/- had been manufactured. After taking into consideration the
instances of sale rates of phoos, the average sale and closing stock
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Neutral Citation No:=2024:PHHC:012389-DB
ITA Nos.92, 89, 90 & 91 of 2003
valuation of phoos, the rate of phoos was taken `90/- per qtl. Resultantly,
the value of the phoos was calculated as under:-
"17% of total paddy processed at 77869 quintals = 13237
a. Value at the rate of Rs.90 per quintal = 1191330/-
b. Value of phoos disclosed = 662214/-
Value of phoos suppressed (a-b) = 476060/-"
4. Resultantly, an addition of `5,29,116/- on account of
supersession in phoos was made. In the appeal filed before the
Commissioner, Income Tax, a finding was recorded that a stereo-type
order had been passed by the Assessing Officer and phoos was quantified
at 9345 qtls. Accordingly, the appeal of the assessee was allowed and the
addition made of `5,29,116/- was deleted.
5. The revenue had taken the matter before the Appellate
Tribunal, wherein while recording the finding that some phoos was used in
the dryer for drying the paddy, however no day-to-day record was
maintained by the assessee and no norms were fixed as to how much
phoos could be used for the purpose of drying the paddy, since it depends
upon many factors like contents of the moisture in the paddy and the
conditions of the environment. Resultantly, 5% of the paddy milled and
produced of raw rice was the methodology which was adopted and the
Assessing Officer was directed to give relief to the assessee @ 5% of the
paddy milled on account of use of the phoos in the dryer for the production
of raw rice instead of 8% allowed by the CIT(A) and directions were
issued to recalculate the addition.
6. We are of the considered opinion that the Tribunal had rightly
quantified the percentage, keeping in view the fact that in the absence of
any record or norms the investigation had been done. In such
circumstances, in the absence of any record being produced by the
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Neutral Citation No:=2024:PHHC:012389-DB
ITA Nos.92, 89, 90 & 91 of 2003
assessee, no substantial question of law would arise as has been framed in
the present appeal. The Tribunal has used its discretion to grant the relief
to the assessee, we do not see any tenable reason to entertain the present
appeal, in the absence of any proven data or record being maintained by
the assessee. Resultantly, the present appeals are dismissed.
(G.S. SANDHAWALIA)
JUDGE
30.01.2024 (LAPITA BANERJI)
Naveen JUDGE
Whether speaking/reasoned : Yes
Whether Reportable : No
Neutral Citation No:=2024:PHHC:012389-DB
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