TMI Blog2004 (3) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... e CIT(A) deleted the additions and consequently the Department is in further appeal before the Tribunal. 3. We have heard the parties. The first issue pertains to the deletion of trading addition of Rs. 1,90,279 added by the AO. The AO made the trading addition for the reasons given on pp. 2-6 of the assessment order, which included (i) Because the stock register had not been maintained; (ii) Because the inventory of opening and closing stock had not been maintained; (iii) Because the purchase could not be linked with the sales; (iv) Because entries of purchase return written by mistake had not been posted in the ledger; (v) Because the purchases had been entered before the delivery date; etc The AO applied the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied a g.p. rate of 11.5 per cent this year because the AO has not given any reasons for applying the same. In our opinion, the finding recorded by the CIT(A) is perfectly alright and in line with our finding in similar cases. In view of our clear-cut finding, there is no need to refer to any other decision relied upon by the assessee in this regard. The ground stands rejected. 4. The next issue pertains to the deletion of disallowance of salary of Rs. 45,000, which was paid to the karta of the assessee-HUF. The assessee is a HUF and a salary of Rs. 45,000 was paid to its karta during the year under appeal. The AO made the disallowance on the ground that there was no valid agreement between the assessee and the karta. From the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f business consideration. Major portion of this advance was made in the earlier year, which is evident from para-9 of the assessment order, which narrates opening debit balance of various parties. The assessee, in addition to his capital, was also having interest-free deposits with him, as evident from para-11 of the assessment order, wherein he himself has admitted that the assessee had not paid any interest to some parties and named as well. The AO has also admitted that the assessee has paid interest on much lower rate to Rajendra Kumar Surana HUF. Therefore, the assessee was having interest-free funds as well. The case of the assessee is that there cannot be any justification for estimation of the notional interest and making addition/d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear and that no such disallowance or addition was made in the past. After considering all the facts, we are unable to understand as to what was the reason on which the AO disallowed such brokerage. As such, the arbitrary action of the AO cannot be allowed to perpetrate. In our opinion, the CIT(A) has rightly deleted the impugned disallowance of Rs. 12,880. We uphold his order on this issue and do not find any merit in the ground raised by the Revenue. 7. The last issue relates to the deletion of disallowance of bank bilty commission and interest of Rs. 51,127. The AO has discussed this issue in paras 12-13 of the assessment order and the CIT(A) in para 11 of the impugned order. The AO disallowed the bank bilty commission and interest, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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