Gyanchand Tarachand vs Commissioner of Income Tax

G.G. Sohani , J.—This is an application u/s 256(2) of the income tax Act, 1961 (''the Act''). The material facts giving rise to this application briefly are as follows:

The assessee is a registered firm. During the assessment year 1974-75, the assessee derived income from sale of groundnut and from ginning of cotton. The assessee did not maintain day-to-day record of consumption of groundnut and production of dana. Hence, the ITO and on appeal, the AAC and the Tribunal held that the assessee had failed to explain the difference of 35 quintals taking the yield of dana from dried groundnut at 70 per cent. In this view of the matter, the Tribunal upheld the addition of Rs. 11,970 to the total income of the assessee. The Tribunal also upheld the addition of Rs. 1,200 in the total income of the assessee on account of excess shortage shown in the kapas account. Aggrieved by the order passed by the Tribunal, the assessee sought a reference, but the Tribunal held that the decision of the Tribunal was based on the appraisal of the relevant facts on record and did not give rise to any question of law. The Tribunal, therefore, rejected the application for reference. Hence, the assessee has filed this application, praying that the Tribunal be directed to refer the following questions of law:

Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in rejecting the books of account of the assessee and making resort to proviso to section 145(1) of the income tax Act for non-maintenance of day-to-day record of consumption of groundnut and production of dana?

On the facts and in the circumstances of the case, whether the Tribunal is right in law in calculating the driage at 25 per cent on 325 quintals of groundnut put for decortication and not on the entire purchases of 483 quintals of groundnut and adopting the average 70 per cent yield from dry groundnut and thereby upholding the addition of Rs. 11,970 on account of alleged excessive shortage?

Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in assuming that the driage will be uniform at 25 per cent in groundnut and yield of dana from dry groundnut will remain at 70 per cent?

On the facts and in the circumstances of the case, whether the Tribunal has jurisdiction to decide the extent of shortage in the kapas account and whether there is any lawful justification for the Tribunal to hold that shortage in kapas account should be only 2 per cent and not 3 per cent as shown by the assessee and thereby retaining the addition of Rs. 1,200 in kapas account on this count?

On the facts and in the circumstances of the case, whether the Tribunal is legally correct in retaining the addition in groundnut account at Rs. 11, 970 and cotton account at Rs. 1,200?

Having heard the learned counsel for the parties, we have come to the conclusion that this application deserves to be rejected. The learned counsel for the applicant referred to a number of decisions, but these decisions are distinguishable on facts, as the question of law which arose for consideration in these cases was whether there was material for the Tribunal to apply the proviso to section 145(1) of the Act and to add certain sum as income of the assessee. In the instant case, the Tribunal had upheld the finding of the ITO and the AAC regarding rejection of the assessee''s book results. There was material before the Tribunal for the addition made to the income of the assessee. In our opinion, therefore, no question of law arises as urged on behalf of the applicant. The application is, therefore, rejected. No order as to costs.