Law: Income Tax Act, 1961

Section: 256(1)

Section 143 of the Income-tax Act, 1961 - Assessment - Additions to income - Assessment year 1964-65 - Assessee took on lease forest compartment against certain royalty - Subsequently, assessee made representation to chief conservator of forest complaining therein that over 65 per cent of trees marked fit for felling had turned out as unsound and praying to reduce royalty to volume found actually sound - Divisional Forest Officer (DFO) reported that minimum of rot could be fixed at 55 per cent - Government accorded sanction to reduction of royalty - For three years assessee showed profit but for relevant year assessee filed loss return - Assessing Officer made addition on account of low yield and suppression of sale - Whether mere low yield or out-turn of sawn timber in accounting year or manifestation of meager gross profit could be taken as indicative of suppression of sales on part of assessee - Held, no - Whether there being no material to show that there was collusion between assessee and DFO, or that assessment of rot made by him was exaggerated or incorrect, authorities were wrong in brushing aside report of DFO - Held, yes - Whether, therefore, addition made by authorities was not justified - Held, yes Circulars and notification - Notification No. SRO 39 dated 30-1-1965 issued by the Government of Jammu and Kashmir FACTS The assessee carrying on business as a forest lessee tendered for and obtained in December, 1958, a lease of forest compartment in Kashmir, against a royalty of Rs. 25,55,555. In the first year of its working of the lease, the assessee did no effect any sale. On 24-1-1961, the assessee made a representation to the Chief Conservator of Forests, complaining therein that on exploitation of the aforesaid forest compartment, it had found that over 65 per cent of the trees marked fit for felling had turned out as unsound and praying that 'volume' proportionate thereto be issued to it in some adjoining forest or the royalty be reduced to the volume found actually sound. The DFO reported to the Conservator of Forests that there was heavy incidence of rot in the compartment and that the percentage of rot could be placed at a minimum of 55 per…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492