TaxTMI 
TaxTMI 
2009 (7) TMI 675
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....the entire turnover disclosed by the assessee was not justified when admittedly the assessee' s books of account are not reliable nor complete and the net profit could not be correctly and accurately deduced therefrom? 3. Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal was legally correct in deleting the addition of Rs. 5,73,832 on account of commission on indirect export sales and whether there was basis for such deletion? Whether the deletion of Rs. 15,99,153 by the Income-tax Appellate Tribunal which was added by the Assessing Officer, on account of suppression in the domestic sales and unaccounted local sales was legally justified? 4. Whether the Income-tax Appellate Tribunal was legally justified, on fact and in law, in upholding the deletion of Rs. 96,663 made by the Commissioner of Income-tax (Appeals) relating to excise although it related to the earlier years?" 2. The appeal relates to the assessment year 1988-89. 3. Briefly stated the facts giving rise to the present appeal are as follows: 4. The appellant-company is engaged in the business of manufacturing of drop forged hand tools. Such business is being carried o....
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..... The assessee had claimed commission and discount of Rs. 11,80,488. This commission and discount was ranging between 1 and 7 per cent. in the case of different parties. The assessee explained that on local sale, cash discount of 1 per cent. is allowed to the customers and 3 per cent. agency commission is allowed to the agent. On export sales, agency commission was 5 per cent. except in the case of M/s. Kajriwal Enterprises to whom commission at 7 per cent. was allowed. The Assessing Officer had also noted the complete details of the commission paid by assessee. The details of domestic sales, commission and discount paid thereon was furnished by the assessee before the lower authorities. The entire sales made by the assessee are of excisable goods. While deleting the addition of Rs. 15,99,158 made by the Assessing Officer the Tribunal, inter alia, has observed as follows: "It is beyond comprehension that the charge of alleged suppression of sales has been confirmed by the Commissioner of Income-tax (Appeals) without applying his mind on such elaborate written submission and comprehensive details submitted before him by the assessee. The Assessing Officer has brought no material ....
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....ns of the Companies Act and as required under sections 44AB and 80HHC of the Income-tax Act, 1961. These auditors have given unqualified reports. The correctness of the declared results are also supported by other supporting records such as vouchers for sales, purchases and other expenses. The quantitative details are also supported by day-to-day stock record, various registers required to be maintained under the excise laws. The correctness of the declared production and sales have not been doubted by the excise authorities. The Assessing Officer has failed to find any single instance of inflation of purchase on expenses. The Assessing Officer has also failed to point out any specific item of suppressed sale. The assessee submitted all possible details before the Assessing Officer as well as before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) got the entire details submitted before him checked by the Assessing Officer, by calling for a remand report from her. The Assessing Officer has not been able to point out any single mistake or discrepancy in any of the voluminous and specific details submitted by the assessee. In spite of all these facts....
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....ns. 12. The Tribunal has given cogent and convincing reasons while setting aside the finding of the authorities below. The finding recorded by the Tribunal is bused on appreciation of evidence and material available on record. We do not see any good ground to interfere with the findings recorded by the Tribunal. The Tribunal has meticulously examined the evidence on record and we are in agreement with the finding recorded by the Tribunal on the aforesaid issue. 13. The next controversy is with regard to the disallowance of commission of Rs. 5,73,832 paid by the assessee on indirect export sales. The assessing authority as well as the Commissioner of Income-tax (Appeals) had disallowed the aforesaid commission but the Tribunal had deleted the said additions. Record shows that the commission was paid to M/s. Kejriwal Enterprises at 7 per cent. while the commission to Chinar Exporter (P.) Ltd. was approximately at 5 per cent. The aforesaid export houses did not pass on the benefit under section 80HHC to the assessee being the supporting manufacturers. The Tribunal, while deleting the aforesaid issue, has observed as follows: "We have carefully considered the submissions made ....