RASTOGT, J. - (1.) THE Income -tax Appellate Tribunal, Delhi Bench -E, (hereinafter 'the Tribunal'), has, in compliance with a direction given by this court on the assessee's application under Section 66(2) of the Indian I.T. Act, 1922, referred the following question for the opinion of this court : 'Whether the finding of the Tribunal that an amount of Rs. 1,42,706 had not been incurred for loading and unloading is vitiated on account of the fact that it is based on unwarranted assumptions, and on inadmissible evidence and failure to consider relevant material ? '
(2.) THE facts briefly stated are these. The assessee, Sir Shadilal Sugar and General Mills Ltd., Mansurpur, is a limited company and is engaged in the manufacture and sale of sugar. For the assessment year 1961 -62, the accounting period ending June 30, 1960, in its assessment to income -tax the assessee claimed an expenditure of Rs. 1,60,67,168 under the head 'Raw materials consumption account'. This amount included a sum of Rs. 3,02,027 being commission paid to the following loading and unloading contractors: 1. Anand Prakash, 2. Chattar Singh, 3. Mangal Sen, 4. Rajendra Kumar, 5. Avinash Chand, 6. Rameshwardass, 7. S. C. Goel and some others. According to the assessee the rates of commission paid to these contractors for loading and unloading were increased in the relevant accounting year and were as under : A. 101/2 pies per maund at road centres ; B. 111/2 pies per maund at rail centres. Prior to that these rates were 91/2 and 10 pies at road and rail centres, respectively. The assessee also claimed a shortage at one per cent. for the month of April for the reason that sugarcane dries up during this time of the year. According to the assessee for the relevant previous year it was to bear the shortage which represented the difference between the quantity of purchases made at the centres and those received at the mill gate. The ITO, relying on the statements of Dharam Prakash, Assistant General Manager and Secretary of the assessee -company, Madan Lal and Prem Chand Garg, two other employees of the assessee, and the periodical fortnightly and final statements, which he could secure, came to the conclusion that the shortage was actually not borne by the assessee but it recovered and/or reimbursed the same from the loading and unloading contractors and the actual value of shortage was 3 pies per maund. Accordingly, he added back a sum of Rs. 1,49,964 to the income of the assessee.
(3.) THE assessee filed an appeal. The AAC, on a reappraisal of the evidence on record, took a contrary view and deleted the addition. He did not rely on the statement of Dharam Prakash for the reason that he had been dismissed by the assessee from its service and, therefore, was a disgruntled person. He relied on the evidence which had been given by some of the contractors on behalf of the assessee in which it was stated that the assessee had not deducted any amount from their bills in respect of shortage. Aggrieved, the Revenue filed an appeal before the Tribunal.;