TMI Blog2015 (7) TMI 990X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax (Appeals) we do not see any reason to interfere in this ground of appeal. - Decided in favour of assessee. Disallowance of 50% of labour charges - CIT(A) deleted the addition - Held that:- Assessing Officer, except, making a reference of payment of labour charges to family members did not collect any specific evidence falsifying the stand of the assessee. All the family members have recognized these labour charges as their income. They are also assessed to tax. The treatment of payment of 50% charges as bogus at the end of Ld. Assessing Officer is based upon his assumption only without making reference to any concrete material. On the other hand, ld. first appellate authority has appreciated the controversy in right perspective and recorded a finding of fact. Before us, except reiteration of the assessment order nothing has been brought to our notice by the department. - Decided in favour of assessee. Clubbing the income of the two daughters in law with the income of the assessee - CIT(A) deleted the addition - Held that:- The ld. Assessing Officer failed to bring any evidence on the record demonstrating the fact that assessee has transferred any income gene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference about specific defect in the accounts, which prohibits him to deduce the income from the accounts.- Decided in favour of assessee. - ITA No. 747/Ahd/2013 - - - Dated:- 24-7-2015 - Shri G. D. Agrawal and Shri Rajpal Yadav, JJ. For the Petitioner : Smt. Sonia Kumar, Sr. D.R. For the Respondent : Shri S.B. Vaidya, A.R. ORDER PER : RAJPAL YADAV, JUDICIAL MEMBER:- Revenue is in appeal before us against the order of ld. Commissioner of Income Tax (Appeals) dated 27-12-2011 passed for assessment year 2009-10. 2. In the first ground of appeal, revenue has pleaded that ld. Commissioner of Income Tax (Appeals) has erred in deleting the addition of ₹ 3,23,646/-. 3. The brief facts of the case are that assessee is an individual engaged in the manufacturing and trading of grey cloth. He has filed his return of income for Assessment Year 2009-10 on 2nd September, 2009 declaring total income of ₹ 12,47,340/-. The case of the assessee was selected for scrutiny assessment and a notice u/s. 143(2) was issued and served upon the assessee. On scrutiny of the accounts, it revealed to the Assessing Officer that assessee has shown himself as a me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. Assessing Officer did not adhere to any such proceedings. He simply observed that assessee failed to prove that HUFs were existing prior to 31st March, 1978. The Commissioner of Income Tax (Appeals) on other hand has observed that assessee has produced the copy of intimation u/s. 143(1) as old as for Assessment Year 1986-87. According to the assessee, he has filed the details of income tax return filed by the HUF and the intimation sent by the department, the assessee has been treating the existence of HUF in the past. In our opinion, the action of the Assessing Officer is only of denial of any fact. He himself did not bring any evidence on the record which could demonstrate the stand of the assessee as false. Therefore, after looking to the finding of Commissioner of Income Tax (Appeals) as well as the written submissions of the assessee reproduced by Commissioner of Income Tax (Appeals) in para no. 2.2, we do not see any reason to interfere in this ground of appeal. It is rejected. 6. Ground No. 2. In this ground of appeal, the grievance of the revenue is that ld. Commissioner of Income Tax (Appeals) has erred in deleting the addition of ₹ 16,13,022/- which adde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. With the assistance of ld. representatives, we have gone through the record carefully. We find that Assessing Officer, except, making a reference of payment of labour charges to family members did not collect any specific evidence falsifying the stand of the assessee. All the family members have recognized these labour charges as their income. They are also assessed to tax. The treatment of payment of 50% charges as bogus at the end of Ld. Assessing Officer is based upon his assumption only without making reference to any concrete material. On the other hand, ld. first appellate authority has appreciated the controversy in right perspective and recorded a finding of fact. Before us, except reiteration of the assessment order nothing has been brought to our notice by the department. Therefore, after looking to the submissions of the assessee reproduced by Commissioner of Income Tax (Appeals) and the finding extracted (supra), we do not see any reason to interfere in the order of Commissioner of Income Tax (Appeals) on this issue. This ground of appeal is rejected. 9. In ground no. 3, the revenue has pleaded that ld. Commissioner of Income Tax (Appeals) has erred in deleting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law, their income cannot be clubbed in the hands of the assessee. Looking to the finding of Commissioner of Income Tax (Appeals) extracted (supra), we do not find any error in it. This ground of appeal is rejected. 13. In ground no. 04, revenue has pleaded that ld. Commissioner of Income Tax (Appeals) has erred in deleting the addition of ₹ 26,30,205/-. 14. The brief facts of the case are that Assessing Officer has rejected the book result of assessee and estimated the GP and made an addition of this amount. 15. On appeal, ld. Commissioner of Income Tax (Appeals) has deleted the addition by observing as under:- 5.3 I have considered the facts on the issue and found that the AO has estimated the gross profit on the basis of misplaced grounds. He has not given any specific comparable case to show that the GP shown by appellant is less than any other case of the same line of business. He has made general remarks that in the line of this business, GP of 5 to 15% are shown. Further, for rejecting the books of account, he has taken the grounds of other disallowances made in the assessment order which have already been deleted while deciding the other grounds of appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Gazette from time to time the accounting standard required to be followed by any class of assessee in respect of any class of income. Thus, it indicates that income has to be computed in accordance with the method of accountancy followed by an assessee, i.e., cash or mercantile. Such method has to be followed keeping in view the accounting standard notified by the Central Government from time to time. Sub-clause (3) provides a situation, i.e., if the Assessing Officer is unable to deduce the true income on the basis of method of accountancy followed by an assessee then he can reject the book results and assess the income according to his estimate or according to his best judgment. The Assessing Officer in that case is required to point out the defects in the accounts of assessee and require to seek explanation of the assessee qua those defects. If the assessee failed to explain the defects then on the basis of the book results, income cannot be determined and Assessing Officer would compute the income according to his estimation keeping in view the guiding factor for estimating such income. 18. In the light of above, let us examine the facts of present case. From perusal of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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