TaxTMI 
TaxTMI 
TaxTMI 
2015 (9) TMI 1002
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.... fall in N.P. rate for job charges income and also failed to elucidate any reason for huge increase in expenses in the A.Y. under consideration. 3. That the Commissioner of Income Tax (Appeals) has erred in law and on facts in allowing the relief of Rs. 11,50,186/- deleting the addition made on account of disallowance of Commission without appreciating the fact that the same was paid by the assessee company to M/s Ram Shree Steels Pvt. Ltd. without any specific services rendered by it and assessee failed to establish that the said expenditure was solely and exclusively incurred for the purpose of the business of assessee company. 4. That the Commissioner of Income Tax (Appeals) has erred in law and on facts in allowing the relief in respect of various disallowances made under different heads of expenditure debited without considering the facts and material brought on record by the A.O. as well as marks of the case. 5. That the order of Commissioner of Income Tax (Appeals), being erroneous, unjust and bad in law be vacated and the order of Assessing officer be restored." 3. Shri P. K. Kapoor, C. A. submitted an application for adjournment but since this is an old appeal and hear....
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....accounts are not separately maintained then it is not correct to estimate income for a part of income and leave the remaining. Considering all the aspects I have come to the conclusion that the Assessing officer has erred in rejecting and adding Rs. 11,35,126/- on adhoc estimate basis by merely comparing the previous year comparables. Thus the appellant gets relief and the addition made by the Assessing Officer is deleted." 6. We find that the only objection of the Assessing Officer is that the net profit rate in the present year against job charges has been reduced to 63.27% as against 76.89% in assessment year 2002-03 and 75.58% in assessment year 2001-02. The Assessing Officer has applied the average net profit rate of 76.23% being average of last two years. In this regard, it was the claim of the assessee before learned CIT(A) that the assessee has not maintained the books of account of job work separately and selling of parts separately. Regarding the reason for fall in net profit rate, it was explained before the Assessing Officer that the assessee has not segregated the travelling and other expenses incurred during providing maintenance services of diesel engine and parts s....
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....so was a client brought by the commission agent has been accepted by the accountant of the Commission agent which clearly signify that services have been rendered. Else it is normally not there that such information are available with mere accountants. Moreover it's a statement of oath under section 131 of the Income Tax Act, 1961 and nowhere in the order the assessing officer has proved that the statement made on oath is false. Thus keeping in mind all the facts and circumstances of the case, I am of the opinion that the commission payment is justified and the addition needs to be deleted." 8. From the above Para from the order of learned CIT(A), it is seen that a clear finding has been given by CIT(A) that the genuineness of the transaction is justified by the statement of the authorized persons who appeared on behalf of the commission agent. He has also noted that a statement on oath u/s 131 of the Act has been recorded by the Assessing Officer of the Accountant of the commission agent and he has confirmed the services rendered. The present director of the commission agent also appeared before the Assessing Officer but he could not throw any light on this aspect because he ....
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.... 2,200/-, it is noted by CIT(A) that the disallowance has been made for documents expenses of new jeep. In our considered opinion, such expenses for new jeep cannot be considered as Revenue expenditure and hence, we decline to interfere in the order of learned CIT(A) on this issue. 9.2 Regarding disallowance of Rs. 7,430/- under the head advertisement expenses, it is noted by CIT(A) on page No. 10 of his order that the bills and vouchers produced by the assessee are self-made vouchers but advertisement expenses are normally properly supported by bills and vouchers and if not supported by bills and vouchers, it needs to be disallowed. Learned A.R. of the assessee could not point out any defect in this finding in the order of CIT(A) and therefore, we decline to interfere in the order of CIT(A) on this issue. 9.3 Regarding disallowance of misc. expenses of Rs. 25,123/-, which has been restricted by CIT(A) to Rs. 7,920/-, we find that CIT(A) has allowed relief of Rs. 17,203/- in respect of balance written off and therefore, we do not find any reason to interfere in the order of CIT(A) for relief allowed by him on this issue. Regarding the addition confirmed by CIT(A) of Rs. 7,920/- o....