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TMI Blog1987 (1) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... the business of processing and sale of marine products. For the assessment year under consideration, the assessee filed a return declaring an adjusted loss of Rs. 13,64,664. In the draft assessment order dated 1-2-1980 under section 144B of the Income-tax Act, 1961 ('the Act'), the ITO proposed an addition of Rs. 1 lakh observing as under : "The assessee's accounts are defective in several respects. In the purchases are included procurement expenses of Rs. 4,26,350 which are not properly supported. Similarly in respect of Tuticorin and Rameswaram purchases, verification is not possible due to lack of addresses of parties. Similarly under frog leg purchases are included Madras purchases which are completely unverifiable. Under production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner (Appeals) deleted the addition in the absence of any specific item of expenditure not covered by voucher which could be pointed out by the ITO. The. ITO did not go into greater details because it was an agreed addition. In the draft assessment order the ITO has proposed an addition of Rs. 1 lakh stating that it was 'on agreed basis'. No objection was taken by the assessee against the draft assessment order proposing computation of income at Rs. 1,55,470 including the addition of Rs. 1 lakh. Hence the assessee was debarred from raising the ground in respect of the addition of Rs. 1 lakh in the appeal before the Commissioner (Appeals). The agreement by T.K. Gopalan Nair, financial adviser to the assessee-firm, amounted to accepta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee before the ITO. The ITO cannot base this addition on the strength of the signature of an unauthorised person. Further the photostat copy of the paper filed by the departmental representative smells a rat because the words 'agrees for disallowance of a total sum of Rs. 1 lakh' are in the handwriting of somebody and the words 'on gross profit account' and the signature at the bottom of it and the words '77-78 asst-Chemmeens Regd' at the gross profit of the so-called agreement appear to be in the hand- writing of T.K. Gopalan Nair. Gopalan Nair had not informed the assessee about his signing the so-called agreement before the ITO immediately after the said date, namely, 30-1-1980. The Commissioner (Appeals) could not deal with the so-ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment year 1977-78. The cases relied on by the departmental representative are all distinguishable. In the case of Ramanlal Kamdar the partner of that assessee-firm appeared before the ITO and stated that the assessee, had no objection to the rectification proposed under section 154 of the Act. In the case of Sterling Machine Tools also, the partner of the assessee-firm sent a letter stating that although the cost of the machine was much more than calculated by the board of experts, its income may be worked out on the basis of the experts' reports. In both the above cases the agreement was made by a partner of the firm which is not the case here. In the case of Jayasree Chit Funds Services (P.) Ltd. the agreement was by the charte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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