Dipak Kumar Sen, J. - (1.) In this reference under Section 256(2) of the Income-tax Act, 1961, at the instance of M/s. Anand Rice & Oil Mills, Calcutta, the assessee, the Tribunal has been directed to refer to this court the following question : "Whether the sustenance of the addition of Rs. 55,000 was based upon conjectures, suspicions and surmises and on a failure to consider the relevant material on record ?"
(2.) The facts found or admitted as appearing from the statement of the case and the annexures thereto are shortly as follows : In the assessment year in question, i.e., 1960-61, the relevant previous year being from 22nd October, 1958, to 10th October, 1959, the assessee had owned and run a rice mill at Bolpuv in the district of Birbhum. In that year the assessee purchased paddy from local suppliers, viz , "byaparis" and also from the cultivators. In the assessment for the said assessment year the Income-tax Officer noted that the purchases of paddy were supported only by the assessee's own documents being bills containing signatures and thumb impressions of the sellers. The Income-tax Officer also took note that the average cost price of paddy so purchased was Rs. 13.44 per maund. The cost of rice obtained from such paddy including the manufacturing and other expenses came to Rs. 22.17 per maund but the same rice was sold at a lower rate, viz., Rs. 21.84 per maund.
(3.) The Income-tax Officer accepted the sale figures of the assessee inasmuch as the same were vouched and were found to have been made at the prevailing market rate. It also appears that the Income-tax Officer accepted the quantity of paddy purchased by the assessee, viz., 53,043 maunds, during the said assessment year. But he did not accept the purchase price of the paddy on the ground that by reason of the aforesaid defects in the supporting documents there was a great possibility of inflating such price. Accordingly, he estimated the average cost price of such paddy at Rs. 12 per maund. On that basis he added a sum of Rs. 6,36,516 to the accounts.;