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The Bazpur Co-operative Sugar Factory Ltd., Bazpur, District Nainital Vs. the Commissioner of Income-tax, Lucknow. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberI.T.R.A. No. 343 of 1975
Reported in(1976)5CTR(All)0158A
AppellantThe Bazpur Co-operative Sugar Factory Ltd., Bazpur, District Nainital
RespondentThe Commissioner of Income-tax, Lucknow.
Excerpt:
- - it considered it but did not find it reliable......disallowed the claim for rs. 80,000/- and added it to the return of the assessee. on appeal to the appellate commissioner, the assessee did not get any relief. the appeal was dismissed. before the appellate commissioner, however, it appears, an extract showing day to day consumption of stores and closing balance of stores and spares was filed for the relevant year. the appellate commissioner on a consideration of the material on record affirmed the findings of the income tax officer. the assessed than went up in appeal before the appellate tribunal. on the 1st day fixed for the hearing of the appeal the counsel for the assessee asked for time to produce day to day consumption of stores register and other registers. the time was granted. the registers were produced. they were scrutinised.....
Judgment:

K. B. Asthana, C.J. - This is an assessees application. In regard to the assessment year 1968-1969 the assessee filed a chart and showed a sum of Rs. 80,000/- as excess consumption not liable to be included in the return for the purpose of assessment. Before the Income Tax Officer Stores ledger and store record appear to have been filed but day to day consumption of stores closing balance of stores and spares were not made available. The Income Tax Officer disallowed the claim for Rs. 80,000/- and added it to the return of the assessee. On appeal to the Appellate Commissioner, the assessee did not get any relief. The appeal was dismissed. Before the Appellate Commissioner, however, it appears, an extract showing day to day consumption of stores and closing balance of stores and spares was filed for the relevant year. The Appellate Commissioner on a consideration of the material on record affirmed the findings of the Income Tax Officer. The assessed than went up in appeal before the Appellate Tribunal. On the 1st day fixed for the hearing of the appeal the counsel for the assessee asked for time to produce day to day consumption of stores register and other registers. The time was granted. The registers were produced. They were scrutinised by the Tribunal. The Tribunal by its judgment gave some relief to the petitioner as they reduced the disallowance of Rs. 80,000/- to Rs. 30,000/-. Thus the assessee by the appellate order of the Tribunal was afforded relief up to Rs. 50,000/-, but the addition of Rs. 30,000/- to the income return was sustained. Now, this application has been made on behalf of the assessee for calling upon the Tribunal to submit a statement of case on the questions mentioned in the application for reference.

We have heard Sri Gulati, learned counsel for the applicant assessee and Sri Deoki Nandan, learned counsel for the Revenue. We do not think that from the judgment of the Tribunal any question of law arises. It was contended on behalf of the assessee that the Tribunal has arbitrarily and for improper reasons rejected relevant evidence furnished on behalf of the assessee in the shape of day to day consumption register and other material. Having assumed that such registers were not made available before the Income Tax Officer, the Tribunal made the following observation :-

'It (assessee) did not specifically dispute the finding of the Income Tax Officer that there was to day to day record of consumption of stores and spares. Before us the assessee attempted to show that at any rate there was a daily record for issue or stores and that, therefore, it could not be said that there was no record of day to day consumption. We are unable to give much weight to this evidence as it was not before the Income Tax Officer or before the Appellate Assistant Commissioner. Looking to the past record and the fact that there was an increase in rates of various materials such as sulpha gunny bags hessian cloth etc. during the relevant accounting year, we are of the view that the addition sustained by the Appellate Assistant Commissioner is excessive ...'

From what we have extracted above from the judgment of the Tribunal it is not possible to hold that the Tribunal rejected the admitting of the additional evidence filed in the shape of day to day register of consumption of stores. It considered it but did not find it reliable. One of the reasons which impressed the Tribunal that such evidence was not made available to the Income Tax Officer for refusing to give weight at the appellate stage cannot be said to be improper. However, it was submitted on behalf of the assessee that in a subsequent order made on an application filed under section 254 of the Income Tax Act, 1961 for rectification the Tribunal has admitted the fact that it refused to admit that evidence. We do not think the subsequent opinion of the Tribunal as to what happened earlier would be relevant for the purpose of calling for a statement of case, as the reference can only be made, as has been submitted by learned counsel for the assessee from the original order passed by the Tribunal in the appeal before, it. We have to find out whether the questions framed, on which the reference is sought arise from the judgment of the Tribunal passed in appeal. The Tribunal has not in our view refused to admit the additional evidence produced before it, but is has not given weight or relied upon it for reasons that it was not produced as the earliest state of the case. We think this cannot be a reason which can be said to be improper or arbitrary. Learned counsel for the assessee drew our attention to some decisions of the Supreme Court, viz. Dhakeswari Cotton Mills Ltd. vs. Commissioner of Income Tax, West Bengal (1954 XXVI I.T.R. 775), Omar Salay Mohamed Sait vs. Commissioner of Income Tax, Madras (1959 XXXVII I.T.R. 151) and Lal Chand Bhagat Ambika Ram vs. Commissioner of Income Tax, Bihar and Orissa (1959 XXXVII I.T.R. 288) in support of his proposition that an improper or arbitrary rejection of additional evidence by Tribunal vitiates its findings, and a question of law will arise whether that finding though of fact is legal and within jurisdiction. We do not think the decision cited by the learned counsel in anyway help him in the instant case. Here we find that no case is made out of rejection or of non admission of any evidence. It was then contended by the learned counsel for the assessee that even non consideration of material evidence for improper reasons or arbitrary reasons will vitiate the findings and give rise to a question of law. As we have said above, we do not find that the Tribunal refused to give weight to the registers produced before it as additional evidence on any improper or arbitrary ground.

3. In the application the main question related to disallowing of Rs. 30,000/- out of the total expenditure. The other questions are nothing but ancilliary questions relating to the same subject matter. All these questions are questions of fact and not of law.

4. As a result of the above discussion, we dismiss this application. We assess the cost at Rs. 100/- payable by the assessee to the Revenue.


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