Sunil Tarafdar, Malda V. I.T.O Wd - 3,Malda, Malda

ITA 363/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4073 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 04-11-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 22-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUDIPTA GUHAJCIT
• Assessee Lawyers: SOMNATH ROY CHOWDHURY
• Keywords: Unexplained cash credit
• Section: 68; 145

Judgement Text

ITA NO. 363/KOL/13 SUNIL TARAFDAR 1 IN THE INCOME TAX APPELLATE TRIBUNAL,D BENCH KOLKATA BEFORE SHRI M.BALAGANESH,ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO.363/KOL/2013 A.Y: 2009-10 SUNIL TARAFDAR VS. I.T.O., WARD 3 , MALDA PAN: ACXPT5074A (APPELLANT) (RESPONDENT) APPEARANCES BY: SHRI SOMNATH ROY CHOWDHURY, ADVOCATE,AR FOR THE A SSESSEE SMT. SUDIPTA GUHA,JCIT, SR.DR FOR THE REV ENUE DATE OF HEARING : 04-11-2016 DATE OF PRONOUNCEMENT : 21-12-2016 O R D E R SHRI S.S. VISWANETHRA RAVI, JM :- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 20-11-2012 PASSED BY THE COMMISSIONER OF INCO ME TAX(APPEALS), JALPAIGURI FOR THE ASSESSMENT YEAR 20 09-10. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS OF APPEAL:- A. FOR THAT THE LEARNED COMMISSIONER (APPEALS) (HER EINAFTER REFERRED TO AS 'THE APPELLATE AUTHORITY') HAS FAILED TO PASS A WEL L REASONED ORDER IN THE INSTANT CASE TO THE EXTENT OF A PART OF THE APPELLA TE ORDER CONCERNED. B. FOR THAT THE APPELLATE AUTHORITY FAILED TO CONSI DER THAT THE RATE OF CONSUMPTION OF ELECTRICITY PER UNIT QUANTITY OF CRU SHING, AS SUBMITTED BY THE ASSESSEE WAS CORRECT AND APPROPRIATE. C. FOR THAT THE APPELLATE AUTHORITY FAILED TO CONSI DER THAT THE ASSESSEE HAS HIS BOOKS OF ACCOUNT AUDITED BY A REPUTED CHARTERED ACCOUNTANT WHO HAS MADE NO ADVERSE COMMENT IN HIS REPORT REGARDING CON SUMPTION OF ELECTRICITY. D. FOR THAT THE APPELLATE AUTHORITY FAILED TO CONSI DER THAT THE WITHDRAWAL OF CASH FROM BANK BY ISSUING A SELF CHEQUE WAS MADE FOLLOWING THE NORMAL PRACTICE AND NO MALAFIDE OR DISORDER COULD ACTUALLY BE ATTRIBUTED TO THE SAID TRANSACTION. ITA NO. 363/KOL/13 SUNIL TARAFDAR 2 E. FOR THAT THE APPELLATE ORDER DATED 20.11.2012, PASSED BY THE COMMISSIONER(APPEALS) JALPAIGURI IS WRONG AND ILLEG AL ONLY TO THE EXTENT IT MAKES ADDITION TO THE RETURNED INCOME OF THE ASSESS EE AND AS SUCH THE SAME IS LIABLE TO BE MODIFIED OR SET ASIDE AT THIS STAGE . F. FOR THAT THE IMPUGNED APPELLATE ORDER DATED 20. 11.2012, PASSED BY THE COMMISSIONER(APPEALS), JALPAIGURI, IS OTHERWISE WRO NG AND ILLEGAL AND LIABLE TO BE MODIFIED OR SET ASIDE. G. FOR THAT THE APPELLANT CRAVES LEAVE TO ADD, AM END OR ALTER ANY OR ANY OTHER GROUNDS LATER ON AT THE TIME OF OR BEFORE HEA RING OF THIS APPEAL. 3. THE ASSESSEE IS AN INDIVIDUAL AND WHOLE SELLER O F RICE, WHEAT AND MUSTARD AND HAS HIS OWN MILL THROUGH WHIC H PRODUCES MUSTARD OIL, BESIDES, DERIVES HIS INCOME F ROM RETAIL BUSINESS FROM OIL MILL & TRUCK PLYING BUSINESS. THE RETURN OF INCOME WAS FILED ON 22.09.2009 DECLARING A TOTAL IN COME OF RS. 1,94,949/-. UNDER SCRUTINY NOTICES U/S. 143(2) & 14 2(1) WERE ISSUED. IN RESPONSE TO THE AFORESAID NOTICES AR OF THE ASSESSEE APPEARED AND PRODUCED CASH BOOK, LEDGER, BANK STATE MENT, NAME AND ADDRESS OF THE PERSONS FROM WHOM WHEAT WER E PURCHASED AND DEBIT VOUCHERS SHOWING PAYMENT OF REN T FOR GODOWN. 4. GROUND NOS. A,C,E,F AND G ARE GENERAL IN NATURE NEED NO ORDER AND IS DISMISSED. 5. GROUND NO-B IS RELATING TO THE ADDITION OF RS.5, 83,510/- ON ACCOUNT OF DIFFERENCE IN ELECTRICITY CONSUMPTION AN D QUANTITY OF CRUSHING OF MUSTARD SEEDS. 6. THE AO FOUND ON VERIFICATION OF THE AUDITED ACCO UNTS THAT THE ASSESSEE HAS CRUSHED 200 QUINTALS OF MUSTARD SE EDS IN HIS OWN MILL AND CONSUMED ELECTRICITY @ 18 UNITS PER QU INTAL AND CONSUMED 7821 UNITS FOR 200 QUINTALS. THE AO DOUBTE D THE CONSUMPTION OF 7821 UNITS OF ELECTRICITY AS STATED BY THE ASSESSEE, ACCORDING TO HIM, THE QUANTITY OF MUSTARD SEEDS ITA NO. 363/KOL/13 SUNIL TARAFDAR 3 SHOULD HAVE BEEN 434.53 QUINTALS, BUT NOT 200 QUINT ALS. THE AO SHOW CAUSED THE ASSESSEE WHY THE DIFFERENCE OF 234. 53 QUINTALS (434.53-200) SHOULD NOT BE TREATED AS CONCEALED PUR CHASE. FOR NON-COMPLIANCE, AN AMOUNT OF RS.5,83,510/- (234.53 X RS. 24.88 BEING VALUE PER KILO GRAM IS ADDED TO THE TOT AL INCOME OF THE ASSESSEE. 7. APART FROM ABOVE, THE AO FOUND THAT THE ASSESSEE DEBITED IN PROFIT & LOSS ACCOUNT TOWARDS ELECTRIC CHARGES F OR RS.2,71,162/- AND RECEIVED CRUSHING CHARGES OF RS.4 ,47,281/- FROM THE AUDITED REPORT. TAKING INTO CONSIDERATION THE CONSUMPTION OF ELECTRICITY OF 3240 UNITS AS ABOVE T O THE 3239.67 QUINTALS AS FOUND TO BE CRUSHED, THE AO OF CALCULATED CRUSHING CHARGES OF RS.9,71,901/- (3239.67 QUINTALS X CRUSHING CHARGE @ RS.300 PER QUINTAL) AND ADDED THE DIFFEREN CE OF RS. 5,24, 620/- (RS.9,71,901/-RS. 4,47,261/-) TO THE TO TAL INCOME OF THE ASSESSEE AS CONCEALED INCOME. 8. BEFORE THE CIT-A, THE CONTENTION OF THE ASSESSEE WAS THAT THE AO HAD APPLIED INCORRECT RATE OF ELECTRICITY CO NSUMPTION FOR MILLING OF MUSTARD SEEDS AND SEEDS TO BE CRUSHED TW ICE OR THRICE IN ORDER TO GET REFINED MUSTARD OIL AND 37.5 7 UNITS OF ELECTRICITY IS REQUIRED FOR CRUSHING OF ONE QUINTAL OF MUSTARD SEEDS AND THE AVERAGE RATE OF ELECTRIC CHARGE WAS R S. 4.84 PER UNIT. THE ASSESSEE STATED THAT IT HAD CONSUMED 63,6 15 UNITS OF ELECTRICITY WHICH WAS DISTRIBUTED PROPORTIONATELY T O THE MANUFACTURING ACCOUNT AND PROFIT & LOSS ACCOUNT FOR CRUSHING OF OWN MUSTARD SEEDS AND FOR OTHERS AND SUBMITTED THE PHOTO COPIES OF THE ELECTRICITY BILLS. THE ASSESSEE WAS C ONTENDED THE ADDITIONS MADE BY THE AO WERE ON SUSPICION AND SURM ISES, WHICH HAS NO BASIS AND RELIED ON THE DECISIONS IN L ALCHAND ITA NO. 363/KOL/13 SUNIL TARAFDAR 4 BAGHAT VS. CIT 37 ITR 288 (SC), CIT VS ASHIM KR. MO NDAL 270 ITR 160 (CAL) ETC. 9. THE CIT-A DELETED THE ADDITION REGARDING SUPPRES SED PURCHASE AND CONFIRMED THE CRUSHING CHARGES OF R.5, 24,620/- AND THE RELEVANT PORTION OF WHICH IS REPRODUCED HER EIN BELOW: I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE LD AR AND ALSO PERUSED THE ASSESSMENT ORDER. APPARENTLY, THE LD AO HAD DIS COVERED THE SUPPRESSION OF PRODUCTION, BUT HE COULD NOT ARRIVE AT A REASONA BLE CONCLUSION. FIRSTLY, THE AO HAS ESTIMATED THE SUPPRESSED PRODUCTION OF OIL S OLELY BASED ON ELECTRICITY CONSUMPTION AND ATTRIBUTED PART OF THE SAME ON ACCO UNT OF UNDISCLOSED PURCHASE. SECONDLY, THE ADDITION MADE ON ACCOUNT OF COST OF SUPPRESSED PURCHASE OF OIL SEEDS CANNOT BE MADE ON THE BASIS O F THE ELECTRICITY CONSUMPTION. EXCESS ELECTRICITY CONSUMPTION ONLY IN DICATES THE SUPPRESSED CRUSHING OF OIL SEEDS WHICH MAY EITHER BE IN THE CA SE OF THE ASSESSEE OR IN THE CASE OF THE OTHERS. IN CASE OF SUPPRESSION OF P RODUCTION OF OIL FOR OWN BUSINESS, THE ADDITION ON ACCOUNT OF SUPPRESSED PRO FIT WAS MORE REASONABLE INSTEAD OF ADDITION ON ACCOUNT OF UNDISCLOSED PURCH ASE. AT THE SAME TIME, THE SUBMISSION OF THE ASSESSEE HAS NO SOUND BASIS. THERE WAS NO MISTAKE AS HIGHLIGHTED BY THE ASSESSEE IN CALCULATION MADE BY THE AO REGARDING TOTAL OIL SEEDS MILLED DURING THE YEAR APPLYING THE RATE OF C ONSUMPTION OF ELECTRICITY. THE AO HAS RIGHTLY WORKED OUT THE TOTAL PROCESSING OF 3234 QNTLS OF OIL SEEDS FOR THE PUBLIC AGAINST WHICH THE CRASHING CHARGES W ERE RECEIVED. ON THE OTHER HAND, THERE WAS NO BASIS IN HIS SUBMISSION TH AT FOR MILLING OF ONE QNTL OF OIL SEEDS, THE ESTIMATED POWER CONSUMPTION IS 37 .57 UNITS. HE DID NOT FURNISH ANY COMPARATIVE CHART SHOWING THE CONSUMPTI ON OF ELECTRICITY AS CLAIMED BY THE OTHER OIL MILLS IN THE LOCALITY OR A NY OTHER AUTHORITATIVE EVIDENCE. IN VIEW OF THE ABOVE FACTS, IT IS HELD THAT THE AO HAS RIGHTLY ESTIMATED THE CONSUMPTION OF ELECTRICITY OF 18 UNIT S FOR MILLING OF ONE QNTL OF OIL SEEDS. ACCORDINGLY, THE AO IS REQUIRED TO RECOM PUTED THE SUPPRESSED INCOME AS UNDER: TOTAL ELECTRICITY CONSUMPTION AS SHOWN BY THE ASSES SEE WAS 63,615 UNITS TOTAL OIL SEEDS COULD BE CRUSHED @18 UNITS PER/QNTL WAS 3,534 QNTLS ASSESSEE CRUSHED OIL SEEDS FOR OWN BUSINESS 200 QNTLS ( CONSIDERING THAT NO SUPPRESSED PURCHASE WAS MADE IN ABSENCE OF ADEQUATE EVIDENCE) TOTAL MUSTARD SEEDS CRUSHED FOR PUBLIC 3,334 QN TLS TOTAL CRUSHING CHARGES RECEIVED @RS.3001- PER QNTL RS.10,00,200/- AS THE AO HAS CONSIDERED IT AS RS.9,71 ,901/-, THE ACTUAL CRUSHING CHARGES RECEIVED IS RESTRICTED TO RS. 9,71,901/- THUS, SUPPRESSED CRUSHING CHARGES RECEIVED WAS RS. 5,24,620/- TO SUM UP THE ADDITION MADE BY THE AO ON ACCOUNT OF SUPPRESSED PURCHASE OF RS.5,83,510/-IS ORDERED TO BE DELETED, BUT THE ADDITION OF RS.5,24,620/- ON ACCOUNT OF SUPPRESSED CRASHING CHA RGE IS CONFIRMED. 10. IN SECOND APPEAL, THE LD.AR ADOPTED THE ARGUMEN TS AS CANVASSED BEFORE THE LOWER AUTHORITIES AND RELIED O N THE DECISION OF HONBLE HIGH COURT OF GAUHATI IN THE C ASE OF I.T.O VS. SATYANARAYAN PAREEK REPORTED IN (2001) 71 TTJ G AU 997 ITA NO. 363/KOL/13 SUNIL TARAFDAR 5 REFERRED TO PARA-5 AND SUBMITTED THAT ESTIMATING THE SUPPRESSED MILLING ONLY ON THE BASIS OF VARIATIONS IN ELECTRIC CONSUMPTION WAS NOT LEGALLY TENABLE UNLESS THE AO BRINGS COMPARATIVE PO SITION OF ANY OTHER MILL OWNER REGARDING CONSUMPTION OF ELECTRIC POWER, VIS- A-VIS, PRODUCTION WAS NOT BROUGHT ON RECORD BY THE ASSESSING OFFICER. FUR THER ARGUED THAT THE HONBLE HIGH COURT OF GAUHATI WHILE DEALING WIT H CASE ON HAND REFERRED TO THE DECISION OF THE HON BLE ANDHR A PRADESH HIGH COURT IN THE CASE OF N. RAJU PULLAIAH V. DY. CTO & ORS. REPORTED IN (1969) 73 ITR 224 (AP) DREW OUR ATTENTION TO THE PARA-6 AN D ARGUED THE CONSUMPTION OF ELECTRICITY BY ITSELF CANNOT FORM A RELIABLE TEST FOR DETERMINING THE YIELD OF OIL, THE YIELD DEPENDS UPO N VARIOUS FACTORS VIZ., THE QUALITY OF THE SEEDS, THE CONDITION OF THE MACH INE, THE SKILL OF THE DRIVER AND THE SURROUNDINGS OF ELECTRIC EQUIPMENT. THE LD.AR ALSO REFERRED TO THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF ST. TERESAS OIL MILLS VS. STATE OF KERALA REPORTED IN 76 ITR 365 AND SUBMITTED THAT IT IS UNSAFE TO UPHOLD THE REJECTION OF THE ACCOUNTS PURELY ON THE GROUND THAT THERE HAS BEEN DIVERGENCE IN THE CONSUMPTION OF ELECTRICITY. 11. ON THE CONTRARY LD.DR RELIED ON THE ORDER OF A O AND REGARDING THE CASE LAWS AS RELIED ON BY THE LD.DR S UBMITS THAT THE HONBLE HIGH COURTS DECIDED THE ISSUES BASED ON THE LOCAL CONDITIONS AND THE RATIO THEREIN CANNOT BE APPLIED IN THE PRESENT CASE AND SOUGHT TO DISMISS THE APPEAL. 12. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD. WE FIND THAT THE AO TAKING INTO CONSIDER ATION THE CONSUMPTION OF ELECTRICITY OF 3240 UNITS AS ABOVE T O THE 3239.67 QUINTALS AS FOUND TO BE CRUSHED CALCULATED CRUSHING CHARGES @ RS.300 PER QUINTAL TO THE QUANTITY AS FOU ND BY HIM BASING ON THE CONSUMPTION OF ELECTRICITY AS SHOWN B Y THE ITA NO. 363/KOL/13 SUNIL TARAFDAR 6 ASSESSEE IS, ACCORDING TO US BAD. AS RIGHTLY POINTE D BY THE LD.AR AS HELD BY THE HONBLE HIGH COURT OF GAUHATI ESTIMATING THE SUPPRESSED MILLING ONLY ON THE BASIS OF VARIATI ONS IN ELECTRIC CONSUMPTION WAS NOT LEGALLY TENABLE AND THE RELEVAN T PORTION OF WHICH IS HEREWITH REPRODUCED HEREIN BELOW: 5. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED AU THORISED REPRESENTATIVE OF THE ASSESSEE AND THE LEARNED DEPARTMENTAL REPRESENTATIV E BOTH AND GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES. WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNT MERELY BECAUSE THERE WAS NO CONSISTENCY BETWEEN MONTHLY CONSUMPTION OF ELECTRICAL ENERGY AND MILLING DONE I N TERMS OF QUINTALS, WITHOUT BRINGING ON RECORD ANY OTHER SUPPORTING CIRCUMSTANCES CORROBORA TING THE ASSERTION OF THE ASSESSING OFFICER THAT LEAD TO SUPPRESSION IN THE MILLING SHOWN BY TH E ASSESSEE. SUCH INCONSISTENCY IN ELECTRIC CONSUMPTION VIS-A-VIS MILLING, COULD BE DUE TO VARI OUS OTHER REASONS BEYOND THE ASSESSEES CONTROL. NOWHERE THE ASSESSING OFFICER HAS OBSERVED THAT ANY SALES WERE FOUND WHICH WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS WHICH ADMITTEDLY WAS MAINTAINED BY THE ASSESSEE. THERE WAS ALSO NO WHISPER THAT THE ASSESSEE WAS INDULGING IN UNACCOUNTED SALES. NO DEFECT IN STOCK REGISTER WAS POINTED OUT BY THE ASSESSING OFFICER. THEREFORE ESTIMATING THE SUPPRESSED MILLING ONLY ON THE BASIS OF VARIATIONS IN ELECTRIC CONSUMP TION WAS NOT LEGALLY TENABLE. THE COMPARATIVE POSITION OF ANY OTHER MILL OWNER REGARDING CONSUMPT ION OF ELECTRIC POWER, VIS-A-VIS, PRODUCTION WAS NOT BROUGHT ON RECORD BY THE ASSESSING OFFICER. MOREOVER, THE ELECTRIC CONSUMPTION DEPENDS ON SO MANY OTHER FACTORS LIKE ERRATIC POWER SUPPLY, LOW VOLTAGE, HIGH MOISTURE CONTENTS OF THE PADDY, ETC. FURTHER, NOWHERE IT WAS INDICATED BY TH E ASSESSING OFFICER THAT ENTRIES OF PURCHASE OR SALES WERE NOT TALLYING WITH THE PURCHASE BILLS/ VOUCHER OR SALES BILLS. IT MEANS PURCHASE AND SALES WERE REGULARLY ENTERED IN THE BOOKS OF ACCOUN TS. THIS WAS ALSO NOT THE CASE OF THE DEPARTMENT THAT ANY SALES/MILLINGS WERE MADE WHICH WERE NOT RECORDED IN THE SALES ACCOUNT. THEREFORE, THERE WAS NO REASON OR JUSTIFICATION FOR MAKING ESTIMATE OF SUPPRESSED MILLING/SALES. WHILE INVOKING THE PROVISIONS OF SECTION 145 OF THE ACT, NO DEFECT EITHER IN THE SYSTEM OF ACCOUNTING OR IN THE METHOD OF ACCOUNTANCY PRINCIPL ES, WAS BROUGHT ON RECORD BY THE ASSESSING OFFICER. MOREOVER, ACCOUNTS REGULARLY MAINTAINED IN THE COURSE OF BUSINESS HAVE TO BE TAKEN AS CORRECT UNLESS THERE ARE STRONG AND SUFFICIENT REAS ONS TO INDICATE THAT THEY ARE UNRELIABLE. THE DEPARTMENT HAS TO PROVE SATISFACTORILY THAT THE ACC OUNT BOOKS ARE UNRELIABLE, INCORRECT OR INCOMPLETE BEFORE IT CAN REJECT THE ACCOUNTS. 13. THE HONBLE ANDHRA PRADESH HIGH COURT IN THE CAS E OF N. RAJU PULLAIAH V. DY. CTO & ORS. REPORTED IN (1969) 73 IT R 224 (AP) HELD THE CONSUMPTION OF ELECTRICITY BY ITSELF CANNOT FORM A RELIABLE TEST FOR DETERMINING THE YIELD OF OIL, THE YIELD DEPENDS UPO N VARIOUS FACTORS VIZ., THE QUALITY OF THE SEEDS, THE CONDITION OF THE MACH INE, THE SKILL OF THE DRIVER AND THE SURROUNDNESS OF ELECTRIC EQUIPMENT A ND THE RELEVANT PORTION AT PARA-6 AS REFERRED BY THE HONBLE HIGH C OURT OF GAUHATI IS REPRODUCED HEREIN BELOW: 6. SIMILARLY IT WAS HELD BY THE HONBLE ANDHRA PRADE SH HIGH COURT IN THE CASE OF N. RAJU PULLAIAH V. DY. CTO & ORS. (1969) 73 ITR 224 (AP) THAT THE A SSESSING AUTHORITY REJECTED THE ACCOUNTS OF THE ASSESSEE, A GROUNDNUT OIL MILLER AND ESTIMATING THE TURNOVER ON THE BASIS OF CONSUMPTION OF ELECTRICITY AND THE RESULT OF TESTS CONDUCTED IN OT HER MILLS, WAS NOT JUSTIFIED. IT WAS OBSERVED IN THIS CASE THAT CONSUMPTION OF ELECTRICITY BY ITSELF CANNOT FORM A RELIABLE TEST FOR DETERMINING THE YIELD OF OIL, THE YIELD DEPENDS UPON VARIOUS FACTOR S VIZ., THE QUALITY OF THE SEEDS, THE CONDITION OF THE MACHINE, THE SKILL OF THE DRIVER, THE SURROUNDN ESS OF ELECTRIC EQUIPMENT, ETC. THERE MAY BE ITA NO. 363/KOL/13 SUNIL TARAFDAR 7 SEVERAL OTHER DISTURBING FACTORS WHICH AFFECT THE N ET YIELD. MOREOVER, THE CONSUMPTION OF ELECTRICITY ITSELF IS AFFECTED BY VARIOUS FACTORS. 9. ON THE BASIS OF ABOVE OBSERVATION WE ARE OF THE CONSIDERED VIEW THAT ONLY ON THE CIRCUMSTANCES RELIED ON BY THE AUTHORITIES BELOW (A O), FOR REJECTION OF THE ACCOUNTS IS LACK OF CONSISTENCY IN THE MONTHLY CONSUMPTION OF ELECTRICA L ENERGY AND MILLING DONE IN TERMS OF QUINTALS. IN OUR OPINION, THIS FACTOR BY ITSELF WIT HOUT ANY OTHER SUPPORTING CIRCUMSTANCES DOES NOT JUSTIFY THE REJECTION OF THE ACCOUNTS. SUCH VAR IATION IN THE CONSUMPTION OF ELECTRICITY VIS-A- VIS OUTPUT CAN BE DUE TO VARIOUS FACTORS BEYOND THE CONTROL OF THE ASSESSEE. THESE FACTORS ARE CONDITION OF MACHINE, SKILL OF MACHINE OPERATOR/DRI VER, THE SOUNDNESS OF ELECTRIC EQUIPMENTS, UNINTERRUPTED/CONTINUITY OF ELECTRIC SUPPLY, ETC. O UR OPINION ALSO GET SUPPORT FROM THE ORDER OF THE TRIBUNAL, AHMEDABAD BENCH, IN THE CASE OF ASSTT CIT V. KHAMBHATTA FAMILY TRUST (1998) 62 TTJ (AHD) 685. IT WAS HELD IN THIS CASE THAT MERELY BECAUSE THE CONSUMPTION OF ELECTRICITY WAS MORE AND THE PRODUCTION WAS LESS IT WOULD BE NO GRO UND FOR REJECTION OF THE TRADING VERSION. AS THE ESTIMATION OF SUPPRESSION IN THE MILLING BY THE ASSESSING OFFICER IS DELETED, THE CONSEQUENTIAL ADDITION ON ACCOUNT OF ESTIMATED CAPI TAL EMPLOYED IN THE SUPPRESSED MILLING, IS ALSO DELETED. 14. WE MAY REFER TO THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF ST. TERESAS OIL MILLS VS. STATE OF KERALA REPORTED IN 76 ITR 365 HELD THAT IT IS UNSAFE TO UPHOLD THE REJECTION OF THE ACCOUNTS PURELY ON THE GROUND THAT THERE HAS BEEN D IVERGENCE IN THE CONSUMPTION OF ELECTRICITY AND THE RELEVANT PORTION AT PARA NO-5 IS REPRODUCED HEREIN BELOW: 5. IN THE CASE ON HAND, THE ONLY CIRCUMSTANCE RELI ED ON BY THE AUTHORITIES BELOW FOR THE REJECTION OF THE ACCOUNTS IS THAT THE RE WAS WIDE DISPARITY IN THE CONSUMPTION OF ELECTRICITY. IN OUR OPINION, THIS FA CTOR BY ITSELF WITHOUT ANY OTHER SUPPORTING CIRCUMSTANCE DOES NOT JUSTIFY THE REJECTION OF THE ACCOUNTS. SUCH VARIATION IN THE CONSUMPTION OF ELECTRICITY CA N BE DUE THE VARIOUS FACTORS OUTSIDE THE CONTROL OF THE ASSESSEE. IT IS UNSAFE TO CATEGORICALLY SAY THAT BECAUSE THERE IS VARIATION IN THE CONSUMPTION OF ELECTRICITY THE ACCOUNTS ARE INCORRECT OR UNRELIABLE. IT SOMETIMES HAPPENS T HAT CURRENT SUPPLY FALLS FAR BELOW THE USUAL VOLTAGE AND ON SUCH OCCASIONS T HE OUTPUT WILL NECESSARILY BE MUCH LOWER THAN THE NORMAL RATE. THE EFFICIENCY OF THE CRUSHING MACHINE AS ALSO THE MOISTURE CONTENT IN THE COPRA WOULD ALS O BE RELEVANT FACTORS TO BE TAKEN INTO ACCOUNT IN ARRIVING AT THE OUTPUT. IT IS, THEREFORE, UNSAFE TO UPHOLD THE REJECTION OF THE ACCOUNTS PURELY ON THE GROUND THAT THERE HAS BEEN DIVERGENCE IN THE CONSUMPTION OF ELECTRICITY. IN THIS CASE, THERE IS ALSO THE ADDITIONAL CIRCUMSTANCE THAT THE DEPARTMENT ITS ELF HAS ADMITTED VARIATIONS RANGING FROM 10 TO 12 UNITS PER QUINTAL; AND THE PETITIONER'S CONSUMPTION OF ELECTRICITY IS 12 UNITS PER QUINTAL, WHICH CANNOT BE SAID TO BE WIDE OFF THE ACCEPTED CONSUMPTION. WE ARE OF THE OP INION THAT IN THESE CIRCUMSTANCES THE REJECTION OF THE ACCOUNTS IS NOT LEGALLY JUSTIFIED. 15. IN THE LIGHT OF OBSERVATIONS OF IN THE AFOREMEN TIONED DECISIONS SUPRA , WE FIND THAT THE AO BASING ON THE CONSUMPTION OF ELECTRICITY AS STATED BY THE ASSESSE E ADDED THE ITA NO. 363/KOL/13 SUNIL TARAFDAR 8 IMPUGNED ADDITION AS CONCEALED INCOME AND IT IS UNS AFE TO HOLD THAT THE ASSESSEE COULD HAVE CRUSHED MORE QUANTITY THAN WHAT HE STATED AND CONCEALED INCOME BASING ON THE VARIAT IONS IN CONSUMPTION OF ELECTRICITY, IN OUR OPINION, THE AO CAME TO SUCH CONCLUSION ON MERE PRESUMPTIONS AND ASSUMPTIONS AND IS NOT IN ACCORDANCE WITH LAW. THEREFORE, WE DELETE THIS ADDI TION AND ACCORDINGLY, GROUND NO. B RAISED BY THE ASSESSEE IN THIS APPEAL IS ALLOWED. 16. GROUND NO-D INVOLVING AN AMOUNT OF RS.1,OO,OOO/ - ADDED AS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT. 17. THE AO FOUND A PERSON WITHDRAWN AN AMOUNT OF RS.1,00,000/- FROM THE BANK ON 12-05-2008 THROUGH A SELF- CHEQUE BELONGING TO ASSESSEE AND THE SAME WAS SHOWN AS CASH WITHDRAWN FROM THE BANK IN BOOKS AS THE ASSESSEE FA ILED TO OFFER ANY EXPLANATION, THE AO TREATED THE SUCH AMOU NT OF RS.1,00,000/- AS UNEXPLAINED CASH CREDIT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 18. BEFORE THE CIT-A, THE AR SUBMITTED THAT THE ASS ESSEE MAINTAINED THE BANK ACCOUNT IN MALDA TOWN WHICH IS 48 KMS AWAY FROM THE BUSINESS PLACE OF THE ASSESSEE. HE HA S GIVEN THE CHEQUE TO ONE OF HIS FRIENDS GOPAL PRASAD KESHRI FO R ENCASHMENT AND ENTERED THE SAME IN THE CASH BOOK AS CASH WITHDRAWN AND FILED DECLARATION OF SUCH FRIEND SRI KESHRI AND PLEADED THE PROVISIONS OF SEC.68 OF THE ACT DOES NO T ATTRACT. THE CIT-A CONFIRMED THE ADDITION AS MADE BY THE AO ON THE GROUND THAT THE PLEA OF THE CASH WAS WITHDRAWN THRO UGH SELF CHEQUE WAS NOT RAISED BEFORE THE AO AND THE RELEVAN T PORTION OF WHICH IS REPRODUCED HEREIN BELOW: ITA NO. 363/KOL/13 SUNIL TARAFDAR 9 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE L D AR AND ALSO PERUSED THE ASSESSMENT ORDER. THE FRESH EXPLANATION AND THE EVIDENCE OF THE ASSESSEE CANNOT BE ADMITTED AT THIS STAGE BECAUSE N O SUCH EXPLANATION WAS OFFERED BEFORE THE AO. ON THE OTHER HAND, ON GOING THROUGH THE BANK STATEMENT, IT IS FOUND THAT IT WAS NEITHER CASH WIT HDRAWAL FROM THE BANK NOR A CLEARING CHEQUE. THE BANK HAD PASSED A TRANSFER E NTRY WHICH MEANS, THE AMOUNT WAS TRANSFERRED TO ANOTHER A/C OF THIS BANK. IT IS, THUS, HELD THAT THE DECLARATION OF SRI KESHRI AND THE SUBMISSION OF THE ASSESSEE HAD NO MERIT OR ANY BASIS AND THE AO HAS RIGHTLY TREATED THE AMOUNT AS UNDISCLOSED CASH CREDIT. HIS ACTION IS CONFIRMED. 19. BEFORE US, THE LD.AR SUBMITS THE SAME ARGUMENTS WERE ADVANCED BEFORE THE CIT-A AND REFERRED TO THE DOCUM ENTS FILED BEFORE US BY WAY OF PAPER BOOK CONTAINING PAGES 1 TO 6. HE FURTHER ARGUED THAT THE FINDING OF THE CIT-A REGARD ING TAKING A PLEA OF WITHDRAWING MONEY ON SELF CHEQUE WAS TAKEN FOR THE FIRST TIME BEFORE HIM IS WRONG AND REFERRED TO PAGE -1 OF THE PAPER BOOK AND SUBMITTED THAT THE ASSESSEE HAS READ Y TAKEN SUCH PLEA THAT IT IS SELF CHEQUE AND PAYMENTS MADE THEREON WAS NOT TO OTHERS. HE ALSO REFERRED TO PAGE 2 & 3 OF TH E PAPER BOOK AND ARGUED THAT THE AFFIDAVIT WAS DEPOSED BY ONE, S RI GOPAL PRASAD KESHRI SUPPORTING THE CONTENTIONS OF THE ASS ESSEE. HE FURTHER REFERRED TO PAGE-4 OF THE PAPER BOOK AND AR GUED THAT IT WAS A SELF CHEQUE OF ASSESSEE AND THE SAME WAS ENCA SHED ON 12-05-2008 AND REFERRED TO PAGE-5 OF THE PAPER BOOK . 20. ON THE CONTRARY, THE LD.DR SUBMITS THAT THE BAN K STATEMENT AS PRODUCED BY THE ASSESSEE CLEARLY SHOWS THAT THE MONEY WAS TRANSFERRED THROUGH CHEQUE AND IT WAS NOT WITHDRAWN THROUGH A SELF CHEQUE AND REFERRED TO PAG E-4 OF THE PAPER BOOK. HE ALSO SUBMITS THAT WHATEVER MAY BE TH E DOCUMENTS AS PRODUCED BY THE ASSESSEE BY WAY OF EVI DENCE ARE FAR FROM TRUTH AND ACCORDINGLY PRAYED TO DISMISS TH E APPEAL. 21. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD. WE FIND THAT THE CIT-A DISMISSED THE APP EAL OF ITA NO. 363/KOL/13 SUNIL TARAFDAR 10 ASSESSEE ONLY ON THE GROUND THAT THE PLEA OF WITHDR AWING OF CASH BY SELF CHEQUE WAS FOR THE FIRST TIME BEFORE H IM. BUT HOWEVER, IT CAN BE SEEN FROM PAGE-1 OF THE PAPER BO OK CLEARLY SHOWS THAT THE PLEA WAS TAKEN BY THE ASSESSEE BEFOR E THE AO BY WAY OF REPLY TO SHOW CAUSE ISSUED AND THE SAME WAS RECEIVED BY THE AO ON 26-09-2011 WELL BEFORE PASSING OF ASSE SSMENT ORDER ON 26-12-2011. THEREFORE, THE FINDING OF THE CIT-A IN THIS REGARD IS INCORRECT. THE OTHER ASPECT OF PAGE NOS. 4 & 5 OF THE PAPER BOOK REGARDING THE SELF MADE CHEQUE AND BANK STATEMENT CLEARLY SHOWS THAT THE CHEQUES ADMITTEDLY BELONGED TO ASSESSEE AND IT SHOWS THE SIGNATURE OF ASSESSEE AND CHEQUE N OS. THEREON ARE REFLECTED THE BANK STATEMENT ON 12-05-2008. THE REFORE, ALL THESE EVIDENCES PROVE THE CONTENTIONS OF ASSESSEE A ND IT SUBSTANTIATES THE CLAIM OF ASSESSEE. IN ANY CASE, N O ADDITION COULD BE MADE U/S. 68 OF THE ACT FOR THE WITHDRAWAL OF THE AMOUNT MADE BY THE ASSESSEE AS THE SAME DOES NOT CO NSTITUTE CREDIT. THEREFORE, WE HOLD THAT THE ADDITION U/S. 6 8 IS NOT MAINTAINABLE IN VIEW OF THE OUR DISCUSSIONS MADE HE REINABOVE. ACCORDINGLY, THE GROUND NO- D RAISED BY THE ASSESSE E IS ALLOWED. 22. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLO WED AS STATED ABOVE. ORDER PRONOUNCED IN OPEN COURT ON 21-1 2-2016 SD/- SD/- M.BALAGANESH S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 21/12/ 2016 ITA NO. 363/KOL/13 SUNIL TARAFDAR 11 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT/ ASSESSEE: SHRI SUNIL TARAFDAR, GARAPARA P.O NALAGOLA, MALDA 733124. 2 THE RESPONDENT/ DEPARTMENT: INCOME TAX OFFICER, WARD - 3 RATHBARI, NETAJI MARKET,MALDA-732101 (WB). 3 4. / THE CIT(A) THE CIT 5 . DR, KOLKATA BENCH 6 . GUARD FILE . **PP/SPS TRUE COPY, BY ORDER, AS STT REGISTRAR