TaxTMI 
TaxTMI 
2011 (1) TMI 682
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....3/Del/2009, relating to the assessment year 2004-2005. The following substantial questions of law have been claimed for determination by this Court: 1- Whether on the facts and in the circumstances of the case, the Ld. ITAT was right in deleting the addition of Rs. 13,88,866/- made on account of operations/ expenses by the Assessing Officer after invoking Section145 of the Income Tax Act, 1961 and bringing on record the defect that the assessee is not maintaining mercantile system regarding the receipts of management charges and, thereafter, estimating the income on the basis of previous record of the assessee and whether the ITAT was right in holding that no defect has been brought on record by the Assessing Officer? 2- Whethe....
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....come-tax (Appeals) {in short "the CIT(A)"}. The CIT(A) allowed the appeal and granted a relief of Rs. 17,06,069/- to the assessee. The findings of CIT(A) have been affirmed by the Tribunal, vide order dated 31.12.2009, in the appeal carried by the assessee. This is how, the Revenue is in appeal before this Court. 4. We have heard learned counsel for the Revenue and have perused the record. 5. The point for consideration in this appeal relates to the genuineness of the claim of the assessee under the heads, 'operational expenses' and 'rebate and discount'. 6. The CIT(A) while allowing the appeal of the assessee with regard to its claim for 'operational expenses' held as under: "9. I have carefully considered the submis....
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....etter dated 28.11.2006 enclosed in the paper book which has been duly studied by me. By this letter, the appellant had explained the increase in the operational expenses as per clause No.2.4-2.2(ii) of the agreement with the Siti Cable Net Work Ltd. and income as per clause No. 2.4-2.2 (i). While the A.O. seems to have accepted the explanations of the appellant regarding the management charges of Rs. 23,68,503/- arrived on the basis of total billing raised to the cable operators for Rs. 1,57,90,022/-, the detailed annexure of billing raised at management charges of which has been examined by me. The A.O,. has not accepted the appellant's explanations regarding the takeover of pay channel as per clause No. 2.4 -2.2(ii), wherein the details o....
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....ey are to be accounted for only during the year under consideration and hence the mercantile method of accounting adopted by the appellant company as per note of Schedule-P of the audit report dated 24.8.2004 is in no way in variation or contradiction with the facts and the circumstances of the case. The appellant company has got its accounts duly audited by the C.A. M/s. Subhash C. Gupta and Co. and vide their report dated 24.8.2004, it is declared by them that the proper books of account as required by law had been kept by the company and the P & L account and its balance sheet are in consonance with the books of account which give a true and fair view of the company's affairs. The A.O. has not found out or pointed out any adverse finding....
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....T, 26 ITR 156 (P&H). Similarly, the books of account can be rejected under Section 145 only where either no method of account was employed or the method employed was such that it did not disclose the true profits, in view of the decision of the jurisdictional High Court in the case of CIT vs. K.S. Bhatia, 269 ITR 257 (P&H). In the instant case, neither of the two above premises are applicable. Thus, the addition of Rs. 13,88,866/- both on facts and law is meritless and hence stands deleted." The issue regarding discount and rebate has been discussed by the CIT(A) in para 20 of its order, which reads thus: "20. I have carefully considered the submissions of the learned A.R. and perused the order of assessment. From the assessment o....