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2015 (3) TMI 893 - HC - Income TaxDisallowance of a portion of the weaving charges paid - interest of justice will be served if 10% further relief is granted out of the disallowance of ₹ 2,72,939/- made by the learned Commissioner of Income Tax (Appeals) and confirmed by tribunal - Held that:- Assessing Officer after rejecting the weaving charges as claimed by the assessee, disallowed a sum of ₹ 7,50,000/-. There appears to be no reason or logic behind such disallowance of a sum of ₹ 7,50,000/-, except saying that the vouchers signed by one person on behalf of all the weavers are not acceptable. That has been explained by the assessee and recorded by the Tribunal of its order to the effect that it is the practice of the trade that weaving charges be paid to one person representing all the weavers. The law of averages adopted by the Commissioner of Income Tax (Appeals) cannot be held to be justifiable, as in the case on hand books of accounts were properly maintained and produced before the Department. We are surprised to note that in the order of the Commissioner of Income Tax (Appeals), the average manufacturing expenses seems to be fluctuating from year to year. There is marginal increase in the manufacturing expenses every year and such increase cannot be simply brushed aside. We have to take into consideration the revision of wages, in the light to the terms of the wage settlement. That record speaks for itself and justifies the expenses as claimed by the assessee. This is accepted by the Commissioner of Income Tax (Appeals) and the Tribunal. Therefore, there appears to be no justification in rejecting the books of account or the vouchers merely on the specious plea that one person signed for all the persons. As we have already stated, the Tribunal has clearly recorded that it is the practice of the trade that weaving charges are paid to one person, representing all the weavers.Tribunal also was not correct in granting further relief of 10% with no rational or reason. The entire exercise of the department appears to be on conjectures and surmises. - Decided in favour of assessee.
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