TMI Blog2018 (5) TMI 1022X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee after allowing deduction for payment of salary and interest to partners from the estimated income of the assessee - Decided in favour of assessee. - ITA No. 228/CTK/2017 - - - Dated:- 15-5-2018 - SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER For The Assessee : Shri D.K.Sheth, AR For The Revenue : Shri D.K.Pradhan, DR ORDER Per N.S.Saini, AM This is an appeal filed by the assessee against the order of the CIT(A)-2, Bhubaneswar dated 25.1.2017 for the assessment year 2012- 2013. 2. The sole grievance in this appeal is that the CIT(A) erred in confirming the action of the Assessing Officer disallowing salary and interest paid to the partners. 3. The brief facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that in view of non-production of required details and purchase invoices and sales memos, the correctness and completeness of those books of account basing on which the accounts are prepared are not satisfactory. Further, assessment cannot be completed on the basis of bank statement. Hence, the book result is rejected and assessment is made by invoking the provisions of section 145(3) r.w.s 144 of the Act. Hence, he estimated the income of the assessee by applying rate of 4% of the turnover of ₹ 97,12,652/- and estimated the income at ₹ 3,88,506/-. The Assessing Officer thereafter observed that since assessment is made u/s.144, no salary and interest is allowed to the partners from the net profit from business as per provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to partners from the estimated income. 7. On the other hand, ld D.R. supported the orders of lower authorities. 8. We have heard the rival submissions, perused the orders of lower authorities and materials available on record. In the instant case, the undisputed facts are that the Assessing Officer not being satisfied with the books of account of the assessee and related vouchers, rejected the book results of the assessee and estimated the income by applying rate of 4% on the gross turnover of the assessee of ₹ 97,12,652/- and arrived at income of ₹ 3,88,506/-. However, he did not allow deduction for salary and interest paid to the partners from this estimated income by invoking the provisions of section 184(5) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in section 144 of the Act. Section 144 of the Act provides that if any person fails to make the return required under sub-section (1) of Section 139 and has not made a return or a revised return under sub-section(4) or sub-section (5) of that section, or fails to comply with all the terms of a notice issued under sub-section (1) of section 142 or fails to comply with a direction issued under sub-section (2A) of that section and having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143, the Assessing Officer after taking into account all relevant material shall make the assessment of the total income or loss to the best of his judgment and determine the sum payable by the assessee on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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