- (1.) REVENUE has filed this appeal under Section 260 -A of the Income Tax Act, 1961 (for brevity, the 'Act') against the order dated 14.12.2007 passed by the Income Tax Appellate Tribunal, Chandigarh Bench "B" (hereinafter, to be referred as 'Tribunal', in short) in ITA No. 250/Chd./2006 relating to the assessment year 2003 -04, so far as it ordered the addition of Rs. 4,85,850/ - to the income of the assessee.
(2.) THE following substantial questions of law would arise for determination: - "1. Whether on the true and correct interpretation of the provisions of Section 69 of the Income Tax Act, 1961 read with Section 46 (1) of the Punjab Agricultural Produce Markets Act, 1961 and Punjab Agricultural Markets Rules, 1962, a claim/ relief can be declined which is within the rule of law? 2. Whether the finding of the Tribunal in sustaining the addition of Rs. 4,85,850/ - as unexplained investment are contrary to the material on record and evidence in the form of Assessing Officer's report under Section 250(4) of the Act -
(3.) THE controversy involved in the present case is in respect of addition of Rs. 4,85,850/ - as income in the accounts of the assessee for the assessment year 2003 -04, which was made by the Assessing Officer during the assessment proceedings. On 11.12.2002 the Flying Squad, Haryana State Agricultural Marketing Board had inspected the premises of the assessee, where 237 quintals of unaccounted 'narma' was found. A market fee of Rs. 9717/ - was realized from the assessee, besides imposition of Rs. 1500/ - as composition fee. The stand of the assessee was that at the time of raid, he was only negotiating with the farmers and had not purchased the same, but after inspection, he purchased the said crop under compelling circumstances and had made entries thereof in his accounts and paid to the farmers. The Assessing Officer not impressed with the explanation of the assessee, ordered addition of the aforesaid amount, besides including an amount of Rs. 13,684/ - towards ginning of aforesaid excess quantity of narma. The assessee filed an appeal before the CIT(A). The CIT(A), on appraisal of material on record put forth by way of a remand report dated 18.10.2005 prepared by the assessing officer held that the transaction was genuine and ordered the deletion of amount of Rs.4,85,850/ - towards costs of narma and Rs. 13,684/ - which was added qua profits earned on the sale of said crop.;