Commissioner of Income Tax vs Ashok Kumar Goel

The present income tax reference has been filed at the instance of the revenue arising from the order of the Tribunal dated 21-5-1996 in I.T.A. Nos. 73 of 1996 and 74 of 1996 relating to the assessment years 1988-89 and 1989-90. The Tribunal has referred the following questions for the opinion of this Court:

R.A. No. 8 (DEL)/1995:

Whether the Honble ITAT was correct in law in holding that addition of R.s. 5,71,93,482 made on account of unexplained investment in purchasing of silver for the work done on his own account but shown as job, was not justified irrespective of the fact that Assessee himself in the statement recorded u/s 132(4) admitted that I am doing chain business?

Whether the Honble ITAT was correct in law in making reliance on the decision given in the case of CST v. Ram Kumar Agrawal (67) STC 400 by the Honble Allahabad High Court, regarding the definition of the word sale irrespective of the fact that silver was being purchased by the Assessee in his own account and then sold as silver chain so onus was on the Assessee to prove entries in support of the version?

Whether the Honble ITAT was correct in law in holding that the silver receipt shown in the cash memo is only for the job work and not belongs to the Assessee irrespective of the fact that the Assessee could not prove his claim by producing the documentary evidence including primary evidence of giving correct and complete name and address of the so-called customers from whom silver was allegedly received?

RA. No. 9 (DEL)/1995:

Whether the Honble ITAT was correct in law in holding that addition of Rs. 3,64,84,850 made on account of unexplained investment in purchasing of silver for the work done on his own account but shown as job was not justified stating that Assessee did only job work irrespective of the facts that Assessee himself, in the statement recorded u/s 132(4) admitted that I am doing chain business?

Whether the Honble ITAT was correct in law in making reliance on the decision given in the case of STC v. Ram Kumar Agrawal Volume 19 (67) Sales Tax Cases page 400 by the Honble Allahabad High Court regarding the definition of the word sale irrespective of the fact that silver was being purchased by the Assessee in his own account and sold as silver chains, so toprove entries in as silver chains, so to prove anything contrary onus was on the Assessee to prove entries in support of his version?

Whether the Honble ITAT was correct in law in holding that the silver receipt shown in the cash memos is only for job work and not belongs to the Assessee irrespective of the fact that the Assessee could not prove his claim by producing documentary evidence including primary evidence of giving correct and complete name and address of the so-called customers from whom silver was allegedly received?

Whether the Honble ITAT was correct in law on relying their own decision dated 7-2-1994 in ITA No. 8031 (DEL)/91 for the assessment year 1988-89 given in Assessees own case on the Assessees appeal while the fact for both the years are not similar as during that year cash memos for alleged job work were kept to justify his alleged job receipt while for the post-search period of the impugned year, the Assessee has deliberately not produced the cash memos regarding alleged job receipt?

The brief facts of the case are that the Assessee filed income tax return in the status of individual and was engaged in the business of silver bullion ornaments on his own account as well as on job work basis. The Assessee claimed that he had maintained books of account in the regular course of business. There was a search and seizure operation u/s 132(1) of the income tax Act, 1961 (hereinafter referred to as the "Act") at the residential and business premises of the Assessee on 10th and 11th August, 1988. During the course of search, besides unexplained stock of silver, cash, ledger, attendance register and cash memo books, etc., were found and seized. The assessing authority observed that the Assessee had shown receipts of making charges at Rs. 12,02,354 for the assessment year 1988-89. He also observed that the Assessee had not maintained day-to-day basis account of manufacturing. He also observed that during the course of search, the Assessee had deposed that he had made unexplained investment in the purchase of silver and machines. The Assessee had admitted that the value of unaccounted silver would be Rs. 26.50 lakhs and that of machines would be Rs. 50,000. The assessing authority treated the amount of Rs. 12,02,354 as income from trading in silver in place of making charges. The Assessing Officer also noted that during the course of search, cash memo books mentioned at Serial Nos. 6 to 10 of Annexure A to the Punchanama relating to the period from 1-4-1987 to 11-11-1987 were found and seized and that on the said cash memos job receipts had been shown but the same did not give any details of the parties from whom the silver for job work was received. The assessing authority also found that almost on all the cash memos rubber stamp of "manufactured by silver smith" had been put. The Assessing Officer computed the total quantity of silver through all the said cash memos for alleged job work received at 9,532.427 kgs. He asked the Assessee to file documentary evidence for receipt of silver from the respective parties and to explain as to why in the absence of verification of receipt of silver, silver weighing 9,532.427 kgs. may not be treated as his own unexplained stock and as to why the value of the said silver be not added to his income. The Assessee stated in reply that he was dealing in manufacture of silver wire and silver chains of different design on job work basis and that he neither purchased nor sold silver or silver wires or chains and that there was no obligation or condition requiring him to maintain addresses of the customers. He further stated that the voucher was issued only when the Assessee was selling goods or receiving any payment against any service or work done for others. He further explained that he was putting stamp of majoori on voucher as "manufactured by silver smith" as a legal necessity of Sales tax and Excise Department. He further pleaded that treating the stock of silver as that of the Assessee on the basis of the vouchers issued against the receipt of majoori was beyond anybodys imagination. The Assessing Officer considered the said submissions and observed that the Assessee had been indulging in the manufacture and trading of silver wires and silver chains on large scale outside the books of account. He referred to the Assessees earlier deposition that the value of unexplained investment in purchase of silver and machines amounted to Rs. 26.50 lakhs and Rs. 50,000 respectively on the date of search. The Assessing Officer, therefore, did not accept the contentions of the Assessee that the silver received belonged to the parties for job work. He computed the value of 9,532.247 kgs. of silver @ Rs. 6,000 per kg. which came to Rs. 5,71,93,482 and added the said amount towards the income of the Assessee.

On a similar facts, the Assessing Officer treated the amount of Rs. 11,37,391 as income of the Assessee in assessment year 1989-90 from trading in silver in place of making charges. The Assessing Officer further computed the value of silver weighing 2,129.475 kgs. @ Rs. 6,000 per kg. At Rs. 1,27,76,850 with reference to cash memos at Serial Nos. 1 to 91 of Annexure A-7 in relation to the period 1-4-1988 to 9-8-1988. With reference to the period after the date of search, the Assessing Officer asked the Assessee to produce cash memo books. The Assessee filed a reply on 22-11 -1991 and submitted that no cash memo books had been maintained for the period after the search. The Assessing Officer drew an adverse inference and observed that the Assessee had deliberately chosen not to produce cash memo books for post-search period. Thereafter the Assessing Officer worked out the unexplained investment in the purchase of silver for the period after the date of search in the manner indicated in the order of the Tribunal at pages 9-10 and held that 3,720 kg. of silver @ Rs. 6,400 per kg. was unexplained investment in purchase of silver for the post-search period. The value computed came to Rs. 2,38,08,000 which was further added towards the income of the Assessee.

On appeal before the CIT (Appeals), the learned Counsel for the Assessee submitted that the Assessee had not made any purchases of silver and that the Assessing Officer did not establish that the silver was purchased by the Assessee. He further submitted that if the silver was purchased there was no question of receiving making charges from the customers. He further submitted that the names of the parties from whom the silver was received were duly noted in the cash memos which showed that only making charges were being received. He further laid emphasis on the fact that once the books were accepted by the department, the AO was not permitted to hold that the Assessee had made investment in the purchase of silver for making them into silver wire or chains. He further submitted that the onus u/s 69 was upon the AO that the Assessee had made the investment. He further submitted that during the course of search, no incriminating material was found indicating that trade done by the Assessee. He also relied on the decision in the case of Sales Tax Commissioner Vs. Ram Kumar Agarwal, wherein the Court was interpreting the definition of sale and it was held that it cannot cover a case where no price was paid and the transaction was merely one of exchange or barter. The learned Counsel further referred to the final statement of the Assessee and his reply to question No. 1 where he stated that he was making chains in the factory on job work and that the silver wires belonged to the traders which the Assessee returned after making chains.

The CIT (Appeals) held that in the absence of full details furnished by the Assessee unexplained investment in the silver alleged to have been received but treated to be own purchase has been considered at Rs. 18,52,950. He further observed that majoori receipts would be from silver purchased in ones own account and that undisclosed receipts computed in this order were at Rs. 9,08,117. He, therefore, held that addition would be Rs. 27,61,067 against Rs. 5,71,93,482.

Against the order of the CIT (Appeals), the Assessee as well as revenue filed Appeals before the Tribunal. It appears that the Assessees appeal being appeal No. 8031 (Delhi)/91 came up for consideration earlier to the appeal filed by the revenue. The Tribunal decided the appeal vide order dated 7-2-1994 relating to the assessment year 1988-89. The Tribunal deleted the addition of Rs. 27,61,067 sustained by the CIT (Appeals).

For the assessment year 1989-90, the assessing authority had made an addition of Rs. 3,65,84,850 consisting of addition of Rs. 1,27,76,850 and Rs. 2,38,08,000 on account of unexplained investment for the purchases of silver for pre- and post-search held respectively. It may be mentioned here that during the course of search, the Assessee had surrendered a sum of Rs. 27,00,000 as an unexplained investment in the silver, In an appeal, the Commissioner of income tax (Appeals) had reduced addition to Rs. 66,72,693 and had allowed the relief at Rs. 2,99,12,157. Against the order of the CIT (Appeals), the Assessee as well as revenue preferred second appeal being ITA Nos. 4930 (Delhi)/92 and 5699 (Delhi)/92, respectively before the Tribunal. The Tribunal vide order dated 20-10-1994, relying upon its own decision dated 7-2-1994 in the Assessees own appeal for the assessment year 1988-89 in ITA No. 8031(Delhi)/91 dismissed the revenue appeal. The Tribunal held that addition made on account of unexplained investment in the purchase of silver was not justified. The Assessee was doing job work only contrary to the Assessees admission in his statement recorded u/s 132(4) of the Act that he was doing the business of silver chains and wires and also surrendered a sum of Rs. 27,00,000 for the investment made in silver found unaccounted at the time of search. The Tribunal has deleted the addition of Rs. 66,72,693 sustained by the CIT (Appeals).

The revenue filed appeal being ITA No. 291(Delhi)/92. It appears that CIT (Appeals) had accepted the application filed by the Deputy Commissioner (Assessment) alleging that there was a mistake apparent on the record in the order of the CIT (Appeals) dated 8-4-1991. Against the said order, the Assessee filed appeal being ITA No. 492 (Delhi)/92. Both the appeals came up for consideration before the Tribunal after the decision by the Tribunal in the appeal of the Assessee. The Tribunal vide order dated 13-10-1994 has disposed of ground No. 1 (1.2 to 1.4) of the department appeal and the Assessees appeal in the light of the order of the Tribunal in ITA No. 8031 (Delhi)/91 in the appeal filed by the Assessee. The consequence was that the revenues appeal was rejected. The revenue filed a reference application No. 242 (Delhi)/94 arising from the order of the Tribunal in ITA No. 8031 (Delhi)/91 raising following questions:

Whether the Honble Tribunal is correct in law in holding that addition of Rs. 5,77,53,675 made on account of unexplained investment in purchase of silver for the work done allegedly on job was not justified irrespective of the fact that the Assessee could not prove his claim by producing documentary evidence including primary evidence of giving correct and complete address of the so-called customers that silver was received from customers?

This reference application u/s 256 of the Act has been rejected by the Tribunal on 18-7-1994. Against the order of the Tribunal dated 18-7-1994, the revenue filed I.T.A. No. 36 of 1995 before this Court. This Court has rejected the reference application vide order dated 1-12-1995. This Court observed as follows:

The contention of the Assessee is that he has been manufacturing silver chains on job basis and for that he is taking the making charges from the customers. The total receipt of the making charges was returned.

The revenue did not accept the contention of the Assessee that he is engaged in doing job work. The vouchers issued by the Assessee showing the weight and making charges were not believed and considering the total weight of silver, as shown in the vouchers, the assessing authority concluded that investment made in that silver remained unexplained. He held that the total weight of silver under such vouchers came to 9,352.427 kgs. Applying the rate of Rs. 6,000 per kg. addition of Rs. 5,71,93,482 was made against the Assessee.

When the dispute was carried to the Appellate Tribunal in appeal, the Tribunal found that the Assessee was engaged only in the job work and all the vouchers issued by the Assessee pertained to that activity. The Tribunal clearly stated in the order that in the past also, the Assessee carried the job work and the Assessees version was always accepted. The Tribunal also observed that in some of the vouchers, complete details of the parties were mentioned, but in most of the vouchers, addresses were not given.

There is nothing on the record to indicate that the assessing authority interrogated the parties whose addresses were given in some of the vouchers. This clinches the issue. Even if the complete details of the parties were not given in all the vouchers, complete details were given at least in some of the vouchers and the department was free to interrogate at least those parties.

On these facts, we do not see that the conclusion reached by the Tribunal that the Assessee was engaged only in the job work was perverse.

It is patent that the finding that the Assessee is engaged in the job work is a finding of fact and no question of law arises therefrom.

For the reasons, we decline to direct the Tribunal to refer the above mention question for the opinion of this Court.

The application, therefore, fails and is dismissed.

It appears that two reference applications being application Nos. 8 and 9 (Delhi)/95 arising from the I.T.A. Nos. 292 and 4929 (Delhi)/92 for the assessment year 1988-89 and I.T.A. Nos. 4930 and 5699 (Delhi)/91 for the assessment year 1989-90 came up for consideration before the Tribunal and the Tribunal vide order dated 27-9-1995 rejected the reference applications. Against the said order, revenue filed two reference applications being I.T.A. No. 73 of 1996 relating to the assessment year 1988-89 and IT.A. No. 74 of 1996 relating to assessment year 1989-90. These two reference applications had been allowed by this Court vide order dated 21-5-1996 and the Tribunal was directed to draw statement of case and refer the questions of law and in pursuance thereof, the Tribunal has referred the aforesaid questions for consideration.

Heard Sri Shambhoo Chopra, learned Standing Counsel and Sri C.S. Agrawal, Senior Advocate appearing on behalf of Assessee.

At the very outset, Sri C.S. Agrawal, learned Counsel for the Assessee, submitted that in the assessment years 1988-89 and 1989-90, for both the assessment years, the Assessee had disclosed the manufacturing on job work basis and for which the necessary account books had been maintained. The assessing authority had rejected the claim of job work and assessed the entire silver used in the job work belonging to the Assessee and the value of such silver had been assessed as an unexplained investment. He further submitted that certain silver was found unaccounted at the time of search. The value of such silver had been surrendered by the Assessee at the time of search itself. The Tribunal deleted addition towards unexplained investment in the silver used in the job work after rejecting the claim of the Assessee to have carried on manufacturing on job work. He submitted that on a consideration of the rival submissions and the entire material on record after giving a detailed reasoning the Tribunal in the appeal of the Assessee for the assessment year 1988-89 in appeal No. 8031(Delhi)/91 had accepted the claim and deleted the addition.

Following the same reasoning, the appeal filed by the revenue for the assessment year 1988-89 had been dismissed and the appeal filed by the Assessee for the assessment year 1989-90 had been allowed and appeal filed by the revenue for the same year had been dismissed. For the assessment year 1988-89, the reference arising from I.T.A. No. 8031 (Delhi)/91 had been rejected by the Tribunal and order of the Tribunal had been confirmed by this Court, by a detailed order dated 1-12-1995 in I.T.A. No. 36 of 1995. The order of this Court dated 1-12-1995 had become final inasmuch as no appeal was filed before the Apex Court. He submitted that in the order dated 1-12-1995, this Court approved the conclusion reached by the Tribunal that the Assessee was engaged only in the job work and further held that the finding of the Tribunal in this regard is finding of fact. He submitted that once the order of the Tribunal in the case of the Assessee holding that the Assessee was engaged only in the job work had been affirmed by this Court and the said order of the Tribunal had been followed in the appeal filed by the revenue for the assessment year 1988-89 and in the appeal of the Assessee as well as the revenue for the assessment year 1989-90 there was no further scope of any fresh consideration in the present reference application inasmuch as the issues are squarely covered by the decision of this Court. He further submitted that in any view of the matter, the finding of the Tribunal is finding of fact based on the material on record and cannot be said to be perverse. He submitted that the statement recorded u/s 132(4) of the Act at the time of search was relating to silver found unaccounted, the value of which had been surrendered by the Assessee during the course of search itself and was not related to the disclosed job work.

Sri Shambhoo Chopra, learned Standing Counsel, submitted that any observation made by this Court in the order rejecting the reference application is not binding and the present questions are to be answered independently on the consideration of the entire facts and circumstances. He submitted that during the course of the search, unaccounted silver was found and in the statement recorded u/s 132(4) of the Act, the Assessee himself admitted that he was carrying on the business of chains and, therefore, the assessing authority has rightly rejected the claim of job work and added the value of silver used in the job work as an unexplained investment.

Having heard learned Counsel for the parties, we have gone through the entire records.

For both the assessment years, the issue involved is the similar, namely, whether the Tribunal was justified in accepting the claim of job work and deleting the addition towards unexplained investment on silver in the job work.

For the assessment years 1988-89 and 1989-90, the CIT (Appeals) accepted the claim of the job work in cases where the names and addresses of the parties were mentioned but had not accepted the claim in respect of those job work where the names and addresses of the parties were not mentioned. In an appeal filed by the Assessee for the assessment year 1988-89, the Tribunal has accepted the entire claim of job work. The Tribunal has recorded the following finding:

We have considered the rival submissions and have gone through the material available on record. In the Profit & Loss account the Assessee had shown receipt of silver (noted in cash memos) for making charges at Rs. 12,02,354 against last years figure of Rs. 5,46,445. The Assessee claimed these receipts of silver as for job work. However, the Assessing Officer in the absence of details of parties, where names and addresses were not from whom such job charges were received and also the Assessee had not maintained day-to-day account of manufacturing, concluded that silver shown in cash memos for alleged job work receipt 9,532.427 kg. is unexplained stock of the Assessee. Therefore, taking the value of this silver @ Rs. 6,000 per kg. (prevailing at that time), made addition to the extent of Rs. 5,71,93,482. However, in appeal, the CIT (Appeals) reduced this addition to Rs. 27,61,067 for the reasons given in the above paragraphs. Therefore, the issue before us for determination is whether the silver receipt shown in the cash memos belongs to the Assessee or the silver receipt is only for job work. The other matter regarding unaccounted silver of Rs. 26.50 lakhs and value of machine Rs. 50,000, is not a subject-matter before us because it pertains to the earlier assessment year. Now we have to analyse whether the Assessee has shown receipt of silver for job charges or it belongs to him. In this case the department conducted raid and passed order u/s 132(5) on 6-12-1988 (Paper Book pages 7 to 16). At page 12, the Dy. CIT, Special Range, Agra, himself has admitted that the Assessee is engaged in the job work of silver wire. Similar to that of Shri Orn Prakash Aggarwal in whose case also raid was conducted on the same day. Besides this, we have gone through sample of cash memos filed by the Assessee in which we find that the Assessee had categorically mentioned silver charges for chain manufacturing. In some of the cash memos names of the parties are given but in most of them names and addresses are not given. It will be pertinent to mention here that these cash memos including the cash memos where names and addresses had not been mentioned, had been relied for making addition. In this regard we have to analyse the legal position. In the case of M. Durai Raj (supra), the Honble Kerala High Court has observed that in a wholesale business like that of the Assessee who bought and sold in terms of the number of bags, maintenance of a stock register in terms of weight would be a very laborious process. There was no need to have complete particulars of the names and addresses of customers in the case of cash transactions, and the absence of such particulars in the sale bills would not be a ground for not accepting the books of account of the Assessee. The Assessee had admittedly maintained his accounts according to the method regularly employed by him. In the case of Md. Umer (supra), the Honble Patna High Court has observed that where there is no finding by the departmental authority as to the unacceptability of the method regularly employed and irregularity of the accounts kept by the Assessee, it is well-settled that in the absence of such a finding, the book results cannot be brushed aside. Similar view was taken by the Supreme Court in the case of Maharaja Shri B.P. Singh Deo (supra). From the ratio laid down by the various High Courts, it is clear that in the nature of business conducted by the Assessee it is not possible to maintain complete particulars like names and addresses of the persons who come forward for making silver chains, etc., on labour charges basis. Therefore, the mere fact that the names and addresses of such customers are not given in the cash memos, cannot be a basis for rejection of books of account. It is an admitted position that in the past assessments made by the department, no infirmity was found in the regular method of accounting followed by the Assessee. Besides this, it will also be seen from the cash memos that a rubber stamp was noticed by the Assessing Officer himself where on each cash memo "manufactured by silver-smith" were found. The Assessee had explained that in view of the requirements of the sales tax authorities stamp is necessarily affixed on each cash memo. Apart from this evidence, the Assessee in his statement has stated that he is engaged in the job work of silver wires and chains manufacturing. Therefore, from these evidences it is clear that the Assessee was engaged in the business of manufacturing of silver wires and chains on job work basis. The silver found mentioned in the cash memos belonged to the customers. In such a situation where the silver is received for job work basis, legally the receipt of silver cannot be held to be sale under the U.P. Sales Tax Act, 1948, which is the decision of the jurisdictional High Court. In the case of STC v. Ram Kumar Aggarwal (supra), this Court has observed as under:

The definition of sale in the U.P. Sales Tax Act, 1948, must be construed in the sense which it has in the Sale of Goods Act, 1939. The words "other valuable consideration" in Section 2(h) of the U.P. Sales Tax Act, 1948, must be interpreted on the basis of the rule of ejusdem generis to mean cheques, bills of exchange or any such other negotiable instruments. They cannot cover a case where no price is paid and the transaction is merely one of exchange or barter. Therefore, the giving of bullion and making charges by a dealer in bullion and ornaments in exchange for readymade ornaments manufactured by goldsmiths is not a "sale of bullion" within the meaning of the U.P. Sales Tax Act, 1948, but is only a barter exchange transaction and, therefore, not liable to be taxed.

The words "other valuable consideration" occur in Section 2(h) and which do not find a place in the definition "sale" in the Sale of Goods Act, 1930, must be held to be ultra vires the Provincial or State Legislature.

From the tenor of the letter of enquiry sent by the Dy. Commissioner of income tax, Agra dated 25-2-1991, given at paragraph 2, it is clear that they were enquiring about the job receipts, names and addresses of the parties from whom the job charges were received by the Assessee and the details of owners of silver. Therefore, the department was sure that the Assessee is engaged in the job work only. There is another important evidence in this case which is filed by the Assessee showing that similar type of raid was conducted in the case of Shri Om Prakash Agarwal, Proprietor of Silver-wire Manufacturers. The income tax Officer made additions in the same way as he has done in the case of the Assessee. In the case of Om Prakash Agarwal, the department has categorically mentioned that Shri Om Prakash Agarwal was engaged in the manufacturing of silver chains, etc., on job charges basis. The case of the present Assessee is similar to the case of Shri Om Prakash Agarwal. However, the department has adopted two standards for these two persons without bringing on record any additional material to show that the silver belongs to the Assessee and it was not received for making chains on job charges basis. The CIT (Appeals) has gone on the basis of results of the previous year for sustaining additions mentioned in paragraph 3 of the order above. However, we find that the finding of the CIT (Appeals) is incorrect in view of the analysis of figure given by the Assessee as under:

A.Y.

Receipts in (in Rs.)

Closing stock (Rs.)

Ration of closing stock with investment

Correct Percentage

Net Profit (Rs.)

% over receipt

Correct, %

Increase of receipt over last year %

1984-85

53,176

78,740

.68

.68

5,667

10.15

10.65

--

1985-86

1,24,695

93,540

2.56

1.33

24,538

15.37

19.67*

234.49%

(276%)

1986-87

3,62,408

1,41,540

--

2.56

55,733

--

15.38%

290.63%

1987-88

5,46,445

1,54,740

3.53

3.53

90,402

18.54%

16.54

150%

(10%)

1988-89

12,02,359

5,41,725

2.2

2.2

6,49,828

74.17%

54.05

2.20%

(250%)

The basis of 4.4 time adopted by the CIT (Appeals) assumes purchases of silver in a one go and also overlooks the fact that purchase of silver was made by the Assessee in the later part of the year. Therefore, taking into consideration the facts, circumstances, evidence and the legal position on the point, we are of the opinion that no addition is called for in the case of Assessee as unexplained investment in the silver account of the Assessee. Addition sustained by the CIT (Appeals) is deleted. This disposes of ground Nos. 1 to 11 in the case of Shri Ashok Kumar Goyal.

This Court has rejected the reference application approving the aforesaid conclusion arrived by the Tribunal and further observed that the finding of the Tribunal is not perverse and is finding of fact. We do not find any substance in the argument of learned Standing Counsel that the observation made in the order dated 1-12-1995 by this Court has no binding effect. If the reference application would have been rejected only on the ground that no question of law arises, the position would be different but in the present case, the Tribunal has passed a detailed order for rejecting the application. Therefore, the observation made in the order, according to us, has a binding effect.

We are further of the view that once the order of the Tribunal accepting the claim of the Assessee of job work in its entirety has been approved by this Court and has become final, no contrary view can betaken. In the reference filed by the revenue against the order of the Tribunal in appeal filed by the revenue, only the conclusion drawn by the Tribunal in the case of Assessees appeal has been followed. Moreover, the findings of the Tribunal are based on the appreciation of evidence on record and cannot be said to be perverse on the facts and circumstances, Tribunals view cannot be said to be erroneous or unjustified. There appears to be no reason to take contrary view. Similar is the situation for the assessment year 1989-90 also.

For the reasons stated above, all the questions, referred hereinabove, for the assessment years 1988-89 and 1989-90, are answered affirmative in favour of the Assessee and against the revenue. There shall be no order as to costs.