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TMI Blog2016 (1) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... djourned. Thereafter, the assessee moved an application for adjournment which was also allowed. However, on the date of hearing i.e. 16.9.2015 in response to the notice of hearing none has come present on behalf of the assessee. 3. With the assistance of the ld. DR, we have gone through the record carefully and proceed to decide the appeal on merit. The Revenue has taken following grounds of appeal: "[1] On the facts and circumstance of the case and in law, the Ld. CIT(A)-I, Surat has erred in deleting addition made on account of sundry creditors for want of any proof. [2] On the facts and circumstance of the case and in law, the Ld. CIT(A)-I, Surat has erred by estimating assessee income @ 50% of gross profit & thereby deleting the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er under section 144 of the Income Tax Act. He made various additions to the total income of the assessee. The disallowances made by the AO are as under: "i. 20% disallowance out of sundry creditors of Rs. 92,09,983/- ii. 20% disallowance out of power and fuel expenses of Rs. 55,31,083 iii. Rent of Rs. 99,03,860 iv. 20% disallowance out of repairs to machinery of Rs. 1,88,595/- v. 20% disallowance out of other expenses of Rs. 28,54,867 vi. Depreciation of Rs. 1,49,07,251/-" 6. Dissatisfied with the determination of the income at Rs. 1,95,08,550/-, the assessee went in appeal before the CIT(A). The ld.CIT(A) has decided the appeal of the assessee by observing as under: "8. The case records were also requisitioned from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss of Rs. 46,37,530/-This ground of appellant i.e. Assessing Officer should have started the computation from the loss Rs. 46,37,530/- arises from this fact. However, in the schedule of computation of total income the profit and gains from Business have been shown at Rs. 1, 49, 68, 305/- against which, brought forward loss of Rs. 1, 49. 68, 305/- has set off showing the returned income at NIL. This means that from the loss of Rs. 46,45,910/- a profit of Rs. 1,49,68,305/- has been arrived at after making some adjustments of admissible / non - admissible items, the details of which are not available. Therefore, the Assessing Officer should have started the computation from Rs. 1,49,68,305/- rather than NIL. Since the Assessing Officer has st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is amount i.e. Rs. 1, 23,06,299/- The assessing officer himself allowed set off of loss / depreciation to the extent of Rs. 87,59, 467/- on the basis of assessment order for Asstt Year 2008-09. Therefore, the total income assessed by the Assessing Officer is reduced to Rs. 35,46,833/-. (Rs 1,23,06,299 - Rs. 87,59,467/-) This ground of appeal is therefore, partly allowed. 9. In ground no. 4 the appellant states that it made disallowance u/s 40a(ia) was made in n the return out of expenses. However, disallowance out of same expenses was made by the Assessing Officer again. Since the profit of the appellant has been estimated (supra), this ground does not survive and accordingly dismissed. Moreover, it is not verifiable as to which expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nuine or not genuine ? How they can be non-genuine to the extent of 20%. In other words, either total sundry creditors are genuine or all the sundry creditors genuine unless pointed out specifically. There cannot be any ad hoc disallowance out of these items. This appears to us that though the assessment was framed under section 144 of the Income Tax Act, according to the best judgment of the AO, but the AO failed to collect details by exercising his power in order to determine the fair income of the assessee. He ought to have looked into the earlier and subsequent years details available with the department before determining the income of the assessee. While he considering all these aspects, we set aside both the orders of the Revenue aut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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