TMI Blog1992 (2) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... count were unreliable and estimated the income at Rs. 15,00,000 for each of the two assessment years. On appeal, the CIT (Appeals) noticed that the adverse comments of the statutory auditors were in the region of non-certification of outstanding balances and deposits with bank, non-statement of certain contingent liabilities, non-provision for certain interests that had accrued on loans granted to the company by the Government, non-accounting of interest on due basis on hire purchase sales, misclassification of items in the profit and loss account and balance-sheet, shortages deducted during the physical verification not being provided in the account, absence of adequate system of internal control etc. He also noticed that the appellant as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfrastructure for it to discharge the multi-farious activities. Its accounts were handled by trainees. The undertaking had multi-faced activities in a sprawling area spread over the length and breadth of the State of Kerala. Part of its records was lost in the floods. Therefore it was unable to satisfy the statutory auditors on their queries because of loss of records. Similar situation was faced by the appellant in the assessment proceedings also. The CIT(Appeals) had recognised the difficulties of the assessee, but then he had determined the income of the assessee at 'nil' overlooking the losses sustained by it in each of these years. He submitted that at least depreciation and investment allowance must be allowed. 4. Sri C. Abraham, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliminary expenses in a sum of Rs. 11,666 and 100 per cent depreciation on tools in a sum of Rs. 2,40,896. The CIT(Appeals) had not disallowed any of these claims made by the assessee. What he had done was only to reduce the deficit of Rs. 3,87,776 to nil. That would mean that the book loss of Rs. 5,16,672 as per accounts was reduced by an amount of Rs. 3,87,776, in view of the several defects noticed in the accounts. In our opinion this is only a modest disallowance. Revenue is not on appeal and we have no power of enhancement. Therefore, we do not find any substance in the appeal of the assessee for the assessment year 1979-80. The same is dismissed. 7. For the assessment year 1980-81, the assessee had filed the computation of its incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also registered in the sales 19,61,629.20 were accounted for in the register separately. Agency sales amounting books for the year only in July 1985. The to Rs. 33,75,642.35 was separated from sales above omissions were forced to be found account during the year. Detailed quantity- out by the Corporation only on our pointing wise and value of commission sales out that the profit and loss account of statement had been furnished to the auditors. the Cement Section prepared by it originally disclosed an incredible gross loss of Rs. 54.84 lakhs on a sale turnover of Rs. 12.74 crores. Further in view of the fact that monthly and quarterly quantitative and value statements regarding cement and raw materials, were not available, it was not possib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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