Law: Income Tax Ordinance, 1979

Section: 12(18)

(a) Income-tax--- ---Addition-"--Cost of purchase---Transportation expenses---Difference of expense of cost of purchase of sugarcane with the parallel cases was due to the transportation, as the cane had to be purchased from far areas to run the sugar mill and the extra transportation expenses had to be borne by the parties which were being compensated by the assessee Mill---Assessing Officer had not pointed out any instance of unverifiability despite the fact that the books had been maintained and had been produced before the Taxation Officer, who had to examine the same---No justification was available for addition in cost of sale's and same was deleted by the Appellate Tribunal. (b) Income-tax--- ---Addition-Sale rate of sugar---Due to teething problem, the quality of sugar was not up to the market, the new markets had to be discovered, the assessee had to offer special incentives for sale for sugar and the declared sale rate of sugar was fully justified---Addition was made by referring a parallel case while for making a addition in respect of cost of sales, another parallel case was referred----Addition in sale rate of sugar was without justification and the same was deleted by the Appellate Tribunal. (c) Income-tax--- ---Addition---Sale of molasses by sugar mill---Assessing Officer had not pointed out any instance of unverifiability and had not considered the explanation given by the assessee that the assessee-company having no storage facility had to make instant sales to keep the funds intact---Addition in this respect had also not been made in the rest of the years---Addition on account of sale of molasses was deleted by the Appellate Tribunal being unjustified. (d) Income-tax--- ---Addition---Consultancy charges---Opportunity of being heard---Issue regarding addition of consultancy charges was set aside by the Appellate Tribunal as the same had not been confronted and directed for affording an opportunity of being heard. (e) Income-tax--- ---Addition---Interest accrued on loan---Difference of amount shown as interest accrued on loan from directors and adopted in Profit and Loss account was added towards total income---Assessee had not given any…

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