2015 (7) TMI 1120 - HC - Income Tax

Following substantial question of law framed 1. Whether on facts and in law, the Tribunal is right in confirming adhoc disaalowance made by assessing officer and confirmed by CIT(A) to the extent of ₹ 9,63,569/@ 2.5% of total Weaving charges of ₹ 3,85,42,779? 2. Whether on facts and in law, the Tribunal is right in confirming adhoc disallowance on presumptions and surmises and without any material on record observing only that there is possibility of some inflation in weaving charges? 3. Whether on facts and in law, the Tribunal is right is confirming adhoc disallowacnce even when Assessing Officer has accepted book results and reply given by assessee for low G.P. Rate in assessment order itself? 4. Whether on facts and in law, the Tribunal is right in confirming adhoc disallowance even after accepting finding of CIT (A) that assessee has fully substantiated claim of weaving charges and Assessing Officer has not brought any material to prove contrary?

Summary

The Gujarat High Court admitted the case and framed substantial questions of law regarding the adhoc disallowance made by the assessing officer and confirmed by the CIT(A) in relation to weaving charges. Key questions include confirmation of disallowance based on presumptions and surmises, acceptance of book results and reply by the assessee, and lack of material to prove contrary to the claim of weaving charges.