Law: Income Tax Act, 1961

Section: 256

Income-tax---Appeal to Appellate Tribunal---Powers of Tribunal---Power to admit additional evidence---Income from milling paddy---Addition on ground of low yield of rice---Tribunal considering Government certificate regarding milling---Revenue not challenging certificate---Tribunal was justified in taking into account Government certificate---Deletion of additions was valid---Indian Income Tax Act, 1961---Indian Income-tax (Appellate Tribunal) Rules, 1963, R. 29. There is no prohibition on taking additional evidence at the appellate stage, the only condition being that the Department should not be prejudiced and should be given reasonable opportunity to rebut this additional evidence. The assessee-farm earned income from milling paddy. The Assessing Officer made an addition to its income on the ground of low yield of rice. The assessee explained that the low yield was due to low quality of paddy and that due to bad crop the breakage was higher. However, no evidence was produced for justifying this low yield. Therefore, the Assessing Officer took the yield at 57 per cent. and concluded that the yield shown was less by 657.14 quintals. The Assessing Officer valued this low/short yield at Rs.204.30 per quintal and made an addition of Rs.1,39,260 on this account. An addition of Rs.25,000 was also made on account of unexplained credits. These were upheld by the Commissioner of Income-tax (Appeals). On further appeal, the Tribunal deleted the addition of Rs.1,39,260 on account of low yield. The Tribunal accepted the certificate issued by the Government showing the yield of rice from paddy at 46 per cent. The Tribunal found that Rs.15,000 had been shown in the name of G, Rs.10,000 outstanding in the name of S and hence the credits had been properly explained. Therefore, the Tribunal deleted the addition of Rs.25,000. On a reference: Held, (i) that so far as the certificate issued by the Government regarding 46 per cent. milled paddy was concerned, that was the only document placed before the Tribunal and the Income-tax Department had not objected to it. The additional evidence had been properly entertained. The Tribunal was justified in deleting the addition of…

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