SH. CHATTAR SINGH TOMAR,PAONTA SAHIB vs. ITO , NAHAN

The next issue regarding which the assessee has pleaded that a mistake has occurred in the order is regarding the income from trucks. As per the assessee, the assessee was the owner of four trucks. Further, the assessee had disclosed income of Rs.48,000/- only as truck income for assessment year 1999-2000. However, the Assessing officer estimated the income of four trucks at Rs.96,000/-. The plea of the assessee was that three trucks were sold during the year under consideration, however, the claim of the assessee was not accepted for want of reliable evidence as the registration of the trucks continued to be in the name of the assessee. It was contended before the Tribunal that out of the four trucks, two trucks were owned by the HUF upon 29.10.2000. The Tribunal accordingly directed that in case of ownership of trucks by HUF is established, the Assessing officer will exclude the income of such trucks from the assessment of the assessee for the relevant assessment year and further directed that the above decision in regard to truck income will apply to other years also. In the application of rectification of the order, the assessee has pleaded that the assessee had shown income in the hands of his HUF from two trucks from assessment years 1999-2000 to 2001-02 and then from one truck from assessment year 2002-03 to 2004-05.

The next plea that has been taken is regarding the findings of the Tribunal on commission income. From the seized documents from the premises of the assessee, it reveals that assessee was earning commission income by leasing some mines. The assessee was confronted in this respect but no reply was received by the Assessing officer. The Assessing officer, therefore, made impugned additions. The Ld. CIT(A) also confirmed the additions. Before the Tribunal the assessee had taken a plea that he was not allowed to cross examine the concerned persons, in respect of commission income. The Tribunal, however, noted that the assessee neither during the assessment proceedings nor in appellate proceedings had produced any evidence in rebuttal of the evidence found in the course of search. That even the cross examination was not demanded. Therefore, the addition made by the lower authorities was confirmed. The assessee in this application has taken the plea that assessee had duly demanded the cross examination of the third party during the appellate proceedings before the Ld. CIT(A) in the written submissions made by the assessee before her. A copy of the said written submissions has been placed at page 37 of the paper book dated 20.6.2008.

We have considered the rival contentions. So far as the issue relating to the sale price of the lime stone is concerned, we find that order of the Tribunal on this issue is self-contradictory. Though, in para 10 of the order the Tribunal has directed that for other years except for assessment year 2004-05, the Assessing officer should apply sale rate of different varieties as was applied by the Assessing officer for assessment years 2002- 03 and 2003-04. Further, in the subsequent paras, the Tribunal itself has estimated the sale rate on the basis of report given by the third party and directed the Assessing officer to recalculate the sales of the respective assessment years including of assessment years 2002-03 and 2003-04. Even while arriving at the said conclusion, the evidence submitted by the assessee in the form of bills as were placed at pages 2 to 13 and 58 to 69 of the paper book dated 27.2.2005 has escaped the attention of the Tribunal. In view of this, it is a mistake apparent on record that has occurred in the order of the Tribunal on this issue.

So far as the profits on trucks is concerned, the Tribunal has directed the Assessing officer to exclude the income of such trucks which belonged to the HUF from the assessment of the assessee for the relevant period. In view of this, it is open to the assessee to demonstrate his case before the Assessing officer regarding the income from trucks vis-a-vis the ownership of the trucks. In view of this, we do not find that any error has occurred in the order of the Tribunal on this issue as it is open to the assessee to prove his case before the Assessing officer.

So far as the next issue relating to the commission income is concerned, we find that before the Ld. CIT(A), the assessee had taken a specific plea that the assessee had not been granted the opportunity to cross-examine the third party and a request had been made to give opportunity to the assessee for cross examination him so that the assessee may clarify his position. This plea of the assessee has escaped the attention of the Tribunal while upholding the order of the lower authorities on commission income. Hence, in our view, a mistake has occurred in the order of the Tribunal on this issue.

The next plea of the applicant is regarding estimation of the agricultural income. It has been pleaded by the applicant in the application that ground No.5 taken by the assessee regarding earning of agricultural income was duly argued before the Tribunal but the same has not been adjudicated. 11. We have gone through the ground of appeal

The appeals of the assessee for assessment years 2002-03, 2003-04 and 2004- 05 in to 197/Chd/2008 be listed for adjudication afresh on the limited points as noted above. However, findings of the Tribunal relating to the other issues and other assessment years will stand as such. The Registry is directed to fix the appeals accordingly for adjudication on these issues. Copy of this order be also placed in the respective main files. In view of this the above Misc. Applications filed by the assessee are treated as partly allowed.

Sale rate and estimation of business income (AYs 2002-03 to 2004-05) 2.1 From assessment order for AY 2002-03, it emerges that the assessee extracted four qualities of minerals viz. Katchri, Bhatta, Dolomite and limestone. The assessee did not maintain regular books of accounts. In the absence of any cogent explanation as forthcoming from the assessee, Ld. AO, on the basis of seized documents, estimated suppression of sales as follows: - Item Weight in MT Rate / MT Rs. Sale Rs. Dolomite 2505.000 180.00 4,50,900/- Lime Stone 60574.100 240.00 1,45,37,784/- Bhatta 13784.000 180.00 24,81,120/- Kachri 24194.000 165.00 39,92,010/- Suppression of 101057.100 2,14,61,814/- Sales The Ld. AO applied average GP Rate of 13.70% for AYs 2002-03 to 2004-05 and made addition of Rs.28.90 Lacs. Upon further appeal, Ld. CIT(A) applied GP Rate of 13.5% which was the rate as reflected in AY 1999-2000. The limestone rate was reduced to Rs.220/- per MT and rate for Kachri was reduced to Rs.155/- per MT since the rate taken by Ld. AO pertained to March, 2004. The same resulted into relief of Rs.22.60 Lacs for the assessee. Aggrieved, the assessee is in further appeal before us. 2.2 In AY 2003-04, Ld. AO made similar estimation and worked out an addition of Rs.4.06 Lacs. The Ld. AO adopted rate of dolomite as Rs.180/- per MT which was enhanced by Ld. CIT(A) to Rs.190/- per MT. The rate of limestone was reduced from Rs.240/- per MT to Rs.230/- per MT. The rate of Bhatta was enhanced from Rs.180/- per MT to Rs.190/- per MT. The rate of Kachri was enhanced from Rs.165/- per MT to Rs.190/- per MT. The Rate of GP as adopted by Ld. CIT(A) was 13.5%. By this working, the assessee got relief of Rs.0.21 Lacs. Aggrieved, the assessee is in further appeal before us.

Agricultural Income (AYs 2002-03 to 2004-05) 3.1 The assessee reflected agricultural income of Rs.1.55 Lacs for AY 2002-03 on the ground that it owned 123 Bighas of agricultural land which yielded net income in the range of Rs.1.50 Lacs to Rs.1.75 Lacs per annum. However, it was found that the assessee family owned 45 Bighas and 4 Biswas and most of the land was not cultivated land. Accordingly, 3/4th of this income was treated as income from other sources. The same worked out to be Rs.1.16 Lacs. During first appeal, the assessee did not file any documentary evidences to substantiate the same. Accordingly the estimation of Ld. AO was confirmed. Aggrieved, the assessee is in further appeal before us. 3.2 In AY 2003-04, the assessee reflected agricultural income of Rs.1.64 Lacs. The Ld. AO treated Rs.1.23 Lacs as income from other sources. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. 3.3 In AY 2004-05, the assessee reflected agricultural income of Rs.1.68 Lacs. The Ld. AO treated Rs.1.26 Lacs as income from other sources. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. 3.4 We find that the findings of lower authorities are based on revenue records which established that the assessee was having much lesser land holding than claimed by him. In such a case, the estimation made by Ld. AO, in all the years, is quite reasonable. The arguments made by Ld. AR do not appeal to us in any manner. We see no reason to interfere in the orders of lower authorities. The corresponding grounds, for all the years, stands dismissed.

Commission Income from mining business (AY 2002-03) 4.1 The seized documents revealed that the assessee earned commission income by leasing out his mines to M/s Thakur Mines & Minerals, VPO Kamrau which was also searched on 03-05-2001 wherein similar documents were found and seized. The documents found from the premises of the assessee were duplicate copies of the documents seized from M/s Thakur Mines and Minerals. The ledger of the assessee was also found therein. The assessee was confronted with the same but assessee could not explain the same. Accordingly, Ld. AO made addition of Rs.0.31 Lacs for AY 2002-03. During first appeal the assessee stated that the addition was merely on third party documents without chance to the assessee to confront the other party. However, Ld. CIT(A) upheld the addition against which the assessee is in further appeal before us. No such addition was made in AYs 2003-04 & 2004-05. 4.2 It is clear that the addition is not based merely on third-party statement or documents. During search, identical documents have been found from assessee’s premises as well as at the premises of other person. In such a case the transaction is fully substantiated and no opportunity of cross-examination would be required. The revenue was quite justified to make this addition. The grounds as raised by the assessee stand dismissed.