TaxTMI 
TaxTMI 
1994 (8) TMI 75
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.... of the assessment proceedings the ITO noted that a sum of Rs. 31,652 had been paid as commission to Shri Subodh Kumar, son of one of the partners, namely, Shri Chander Sain Jain, who had 50 per cent share in the firm. The claim was rejected on the ground that in the previous year no such amount had been paid to anybody and further the said Shri Subodh Kumar had been paid a salary of Rs. 1,000 per month in the preceding assessment year for the same work. The ITO further noted that Shri Subodh Kumar was a partner in a firm atDelhilooking after its business affairs and it was difficult for him to look after the affairs of the present firm as well. It was further observed in the assessment order that the "excess amount" had been allowed to Shr....
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.... to the material available on record and these primarily being the bills and vouchers pertaining to the travelling expenses of Shri Subodh Kumar. A reference was also made to the statement of Shri Subodh Kumar recorded on2nd Jan., 1987wherein he had admitted that he was involved in the purchase of sarees for the assessee-firm. The statement was also referred to by the CIT(A) for the finding that the amount of commission had been left with the assessee-firm to be withdrawn on convenient dates as Shri Subodh Kumar wanted to construct a house for himself. In the final analysis the CIT(A) held that Shri Subodh Kumar had been actively involved in the assessee's business and there had been enormous expansion vis-a-vis the sales. He accordingly de....
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.... with the preceding assessment year. The assessee also furnished before the CIT(A) complete details under the head "salary paid" and also referred to the statements on oath recorded in respect of certain employees and wherein they had categorically admitted that they had received the amount mentioned in the books of account. It was further pointed out that the salary paid was commensurate with the amount paid in the preceding assessment year. 8. The CIT(A) accepted the aforesaid arguments with specific reference to the factor that the sales had increased by nearly Rs. 9 lakhs and the assessee had to employ more persons to take care of the sales. He also recorded a finding to the fact that the amount claimed was neither unreasonable nor e....
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.... placed reliance were not confronted to the assessee. It was accordingly urged that the addition be deleted. 12. The CIT(A) considered the aforesaid submissions and held that the cases of the two firms referred to by the ITO were not comparable cases and only the past records of the assessee were to be the relevant factor to decide the reasonableness of the G.P. disclosed. He, however, took note of the two "defects" pointed out by the ITO vis-a-vis the valuation of the closing stock as also the quantitative tally. In the final analysis, he estimated the sales at Rs. 32 lakhs and applied a G.P. rate of 15% resulting in a relief of Rs. 48,000 to the assessee. 13. The learned Departmental Representative vehemently supported the order of ....
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..... Oswal Emporium (1989) 35 TTJ (Del)(TM) 225 : (1989) 30 ITD 241 (Del)(TM) In reply, the learned Departmental Representative stated that the observation in the case of another assessee could not tantamount to the approval of the G.P. rate disclosed by the assessee and especially when in the assessee's own assessment the ITO had made an addition. 16. We have examined the rival submissions and have also perused the material on record to which our attention was invited. The decisions cited at the bar have also been duly considered. On the facts of the case, we are of the view that no addition whatsoever is required to be sustained. The past history of the case shows that the trading results had been accepted all along in the past as also....