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The ITO,Nabha Vs M/s Jagdamba Rice & Genl Mills,Nabha
July, 04th 2012
                     CHANDIGARH BENCH "B" CHANDIGARH


                      Misc. Application No. 287/Chd/2006
                     Arising out of ITA Nos. 66 & 54/Chandi/2002
                         Assessment Year: 1998-99

The ITO,                             Vs   M/s Jagdamba Rice & Genl Mills,
Nabha                                     Nabha

(Appellant)                                     (Respondent)

              Appellant by                :     Shri Akhilesh Gupta
              Respondent by               :     None

              Date of hearing        :          29.06.2012
              Date of Pronouncement:            02.07.2012


      Through this Misc. Application the Revenue has sought rectification of

mistake which has crept into the order of the Tribunal in ITA No. 54/Chandi/2002.

2.    None appeared on behalf of the assessee despite service of notice. Since

the case has been posted on various occasions, therefore, we proceed it to hear

the Revenue's Misc. Application on ex.parte basis.

3.    It has been pointed out that assessee has raised two grounds regarding

addition on account of under statement of sales in husk account amounting to Rs.

2,77,885/- and on account of under valuation of closing stock of husk at Rs.

24,649/- but the Tribunal has restricted the addition on account of closing stock to

Rs. 50,000/- which is not correct.

4.     The Ld. DR referred to the ground of appeal raised by the assessee

reproduced in para 2 of the order of the Tribunal and pointed out that assessee

has challenged two additions namely understatement of sale in husk amounting to

Rs. 2,77,885/- and undervaluation of closing stock amounting to Rs. 24,649/-. The

Tribunal has adjudicated the issue vide ground Nos. 4 & 5 but through para 5, it

has been stated that ground regarding undervaluation of closing stock was not

pressed, therefore, the same was dismissed. In para 4.1 again, the discussion was

made in respect of closing stock only and the addition is restricted to Rs. 50,000/-

which is incorrect.

5.     After considering the submissions of the Ld. DR and relevant materials on

record, we find that grounds of appeal filed by the assessee have been reproduced

by Tribunal in para 2, which reads as under:-

       "1.    On the facts and in the circumstances of the case, Ld. CIT(A) has
              erred in deleting the addition made in the income of the firm on
              account of unexplained money brought by the partners viz. Smt.
              Kaushalya Devi, Shri Pawan Kumar and Shri Paul Chand.

       2.     The Ld. CIT(A) has further erred in deleting the addition made in
              the income of the firm of unexplained cash credit by Shri Ram

6.     The issues have been adjudicated by the Tribunal vide para 4, 4.1 and 5,

which reads as under:-

       "4.    Coming to the cross-appeal by the assessee, in respect of
       husk account, at the outset if was pointed out by Ld. AR that the
       addition has been made by the Assessing Officer on account of
       closing stock of husk which was made on estimate basis.           He
       submitted that if addition on account of closing stock is considered

      then same should be carried forward to the opening stock of next
      year. On the other hand, the Ld. DR heavily relied on the order of
      the Assessing Officer and submitted that the plea of the assessee
      that addition on account of closing stock should be considered for
      carrying the opening stock of next year cannot be entertained, in
      view of the fact that the same will disturb the subsequent result
      shown by the assessee.

      4.1     We after hearing both the parties and considering the above
      fact that the addition made by the Assessing Officer on account of
      closing stock of husk was based on estimate and such estimate will
      have a definite bearing on the closing stock shown in next year.
      However, keeping in view the fact that the addition was made and
      benefit of such addition has not been given in subsequent year, we
      are of the opinion that a fair and reasonable addition of Rs.
      50,000/- will meet the ends of justice. We, therefore, restrict the
      addition of Rs. 50,000/- and accept the ground in part "

      5.     Second part of the ground regarding addition of Rs. 24,649/-
      on account of undervaluation of closing stock of husk was not
      pressed by ld AR before us. It is rejected as such."

7.    The combined reading of above paras clearly show that addition in respect

of closing stock amounting to Rs. 24,649/- was not pressed and, therefore, the

same was decided against the assessee. In respect of other addition, the same

was restricted to Rs. 50,000/-. In the discussion, reference is made to closing

stock which seems to be erroneous. From the combined reading of the order it

seems that Tribunal wanted to confirm the addition of Rs. 50,000/- in the husk

account on account of under statement. Therefore, we rectify this mistake and

substitute para 4.1 as under:-

     4.1    After hearing both the parties and considering the various

     facts of the case, the addition on account of understatement of sales

     in husk account is restricted to Rs. 50,000/-.           This is because

     assessee have shown the average rate of sale of husk at Rs. 72.9

     per quintal whereas as per the information gathered by Assessing

     Officer it is clear that Markfed had purchased husk in the range of

     Rs. 93/- to Rs. 112.50 in various months during the assessment year

     1998-99.      Similarly, M/s Amrit Vanaspati Company Ltd and M/s

     Punjab Maize Products Ltd have purchased the husk at higher rate,

     therefore, in our opinion, addition of Rs. 50,000/- would meet the

     ends of justice.

8.   In the result, Misc. Application is allowed.

     Order pronounced on 2.7.2012

            Sd/-                                               Sd/-

      (H.L. KARWA)                               (T.R. SOOD)
    VICE PRESIDENT                         ACCOUNTANT MEMBER
Dated: 2nd July, 2012
Copy to: The Appellant/The Respondent/The CIT/The CIT(A)/ The DR

                          True Cop y
                                                        By Order

                                                    Assistant Registrar
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