ORDER
P. J. GORADIA, A.M. :
This appeal arises from the order dt. 26th April, 1991 passed by Shri M. V. Nayar, Dy. CIT(A), Range II, New Delhi and the two grounds raised are as under :
“1. The learned Dy. CIT(A) erred in sustaining the addition of Rs. 32,800 under the head trading account. The same be deleted in the interest of justice and on the facts.
2. The learned Dy. CIT(A) erred in sustaining the addition of Rs. 2,000 out of traveling expenses and the same be deleted in the interest of justice and on the facts.”
2. The assessed is mainly engaged in sale and purchase of sheep skins and wool. While making the addition the Assessing Officer made the same on the basis of following facts and the reasons as stated in the assessment order :
“During the course of assessment proceedings the assessed was specifically required to furnish wool account. The details furnished by the assessed reveal that the sale of wool has been shown in the month of May, August and October, 1988 for a total sale of Rs. 1,43,683. The assessed was confronted vide order sheet entry dt. 14th September, 1990 and dt. 24th October, 1990 as to why neither any sale of wool after October, 1988 till 31st March, 1988 nor any stock of the wool has been shown ? During the course of assessment proceedings it transpired that there was 5420 kgs. of wool as opening stock and the total wool sold in three months, as mentioned above, was 6485 kgs. @ Rs. 22 per kg. The assessed has himself, vide his letter dt. 24th October, 1990 placed on record, and the statement showing the details of wool purchased and sold submitted by the assessed, placed on record, stated that this 1065 kgs. of wool as from processing of skins from April, 1988 to August, 1988 in small quantity. This quantity of wool was extracted in processing during the period of 5 months. Therefore, for the remaining 7 months also there must have been extraction of wool which has either been sold by the assessed outside the books of accounts because the same has neither been shown in sales nor in the closing stock. It has transpired during the course of proceedings that there were almost regular purchases of the assessed and sales also because the assessed has been sending the skins on consignment basis. Therefore, there was no question of not extracting the wool from the skins during the remaining 7 months of the year. On an average, as shown by the assessed himself, there was an extraction of wool of 213 kgs. p.m. Therefore, for the remaining period of 7 months there would have been extraction of wool of 1490 kgs. which might have been sold by the assessed outside his books of accounts. Therefore, by applying the rate of Rs. 22 per kg. the rate at which the assessed has sold wool, the total sale of 1490 kgs. of wool works out to Rs. 32,800 and the same is added to the trading results declared by the assessed.”
3. Before the Dy. CIT(A) the assessed had made written submissions claiming that the addition was totally baseless because the assessed had not made any sale outside the books of account as alleged. The assessed also explained before the Dy. CIT(A) the manner in which the business was conducted and it was further contended that wool could be extracted only on certain occasions. The assessed also placed before me a chart showing date wise and bill wise sale of papras and skins. From these details it was claimed that no wool was extracted in October onwards from the sheep and the skins were sold in the same form in which they were purchased. A certificate from a leading wool merchant was also placed to substantiate the actual contention of the assessed. The Dy. CIT(A), however, has not passed reasoned order but merely stated that the assessed was unable to give any evidence to rebut the finding of the Assessing Officer and accordingly he confirmed the assessment order.
4. At the time of hearing the representatives of both the sides were heard. In the paper book filed by the assessed, it is found that an affidavit of Shri Abdul Rehaman dt. 16th March, 1993 is also placed as an additional evidence but no reference was made to this evidence and, therefore, the same is ignored. On perusal of the material I am inclined to hold that addition of Rs. 32,800 made by the Assessing Officer is without any basis and, therefore, the same is deleted. Admittedly, there is no evidence that the assessed made any sale outside the books of accounts or the assessed did extract extra wool which is not shown in the books of accounts. In the absence of any evidence on this aspect no addition can be made. I, therefore, delete the addition made in the assessment order.
5. With regard to ground number 2 the amount was disallowed out of the total claim made by the assessed in respect of traveling, tour and cartage on the basis that part of the expenses could not be vouched. The Dy. CIT(A) held that the disallowance was reasonable. Before me no reference was made to this ground and considering the material placed before me I am inclined to uphold the disallowance. To this extent the appellate order is modified and the Assessing Officer is directed to revise the assessment order.
6. In the result the appeal is allowed in part.