' These two cross appeals relating to assessment year 1984-85 call in question the order passed by the learned AAC of Income-tax, Range-A, Multan. Dated 20-11-1986.
2. The facts are that the assessee, a registered firm derived income from operating an ice factory and rice husking business. In the ice factory account the solitary grievance of the assessee was regarding meltage allowed at 10%. It was contended by the assessee's AR that in parallel cases meltage having been allowed at 15%, after rejection of the assessee's version similar treatment should have been meted out in this case as well. We do not feel any hesitation in accepting the assessee's plea. The Assessee's declared version was discarded by the I T 0 and the production was worked out on the basis of usual formula. Meltage is in fact a slack season allowance and it has nothing to do with application of G.P. Rate. In other parallel cases the Tribunal having allowed meltage at 15%, we modify the impugned order directing allowance of meltage at 15% for the year under review.
3. In rice husking business the assessee husked 224160 kgs of IRRI-6 variety of paddy and 260120 kgs of basmati. The assessee had declared different yield of rice, Tota and Phak in both types of husking. The I.T.O. Mentioned the husking results of three parallel cases and made general observation regarding inflation of purchase price of IRRI-6 variety of paddy by the assessee.
Therefore, instead of working out the assessee's production by adopting yield of rice, tota and phak, the assessee's net income from entire rice husking was adopted at Rs,1,00,000. The first appellate authority reduced that estimate to Rs,50,000. Both the parties feel dissatisfied with this treatment.
4. After hearing the representatives of the parties, we do not feel any justification for the treatment meted out by the departmental officers in rice husking account. The assessee having maintained accounts of purchase of two varieities of party there was no sense in adopting net income from this source. The I T 0 was required to work out the assessee's income by adopting yield of rice, Tota and phak in the light of results of parallel cases. Similarly, the learned A A C failed to adjudicate the issue in the proper form as stated above. In this view of the matter, we vacate the impugned order as well as the assessm ent order and remit the matter to the I T 0 for de novo decision of rice husking account in the light of directions given above. The assessee's grievance regarding allowance of machinery repair and electric repair expenses at Rs,14,255 as an item of profit and loss account will also be considered by the I T O.
5. The last grievance of the Department regarding theft account has no merits. The assessee claimed loss of Rs,28,230 on account of theft of paddy/rice. The theft occurred on 13-1-1983 and F I R was lodged on 20-1-1983. Due to lodging of F I R after delay of 7 days, the I T 0 disallowed the assessee's total loss. On appeal the first appellate authority allowed the assessee's claim in toto as admittedly theft had occurred and had lodged an F I R on that behalf. The departmental grievance regarding allowance of Rs,28,230 is devoid of any merits as-the fact of occurrence of theft could not be dislodged by the D.R. On the basis of any material furnished by the I T 0. No interference is called for therein.
6. As a result of the above discussion, the impugned orders are modified on the issue of rice husking account and matter is remitted for de novo decision by the I T O in the light of aforementioned directions. Both the appeals are accordingly disposed of.