9911796707
TMI Blog1986 (6) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... fe Deposit Co., reported in (1982) 26 CTR (SC) 411 : (1982) 133 ITR 756 (SC) was not applicable on the facts of the case and that since the assessee had made no claim of deduction under s. 35B in respect of a sum of Rs. 10,65,000 (Rs. 15,000 for stationery and printing Rs. 50,000 for postage and Rs. 10,00,000 bank interest on packing credit), before the ITO till he framed a draft assessment order, nor even included in the objections the draft assessment order the ld., CIT(A) was not justified in entertaining the assessee's this ground of appeal, and further in directing to allow deduction under s. 35B in respect of aforesaid sum of Rs. 10,65,000 without allowing an opportunity to the ITO to examine the claim on merits. (v) not upholding the addition of Rs. 90,000 made by the ITO in respect of unexplained deposits in the bank for the reasons given in details in the assessment order itself". 2. As regards the first three grounds, the ld., CIT(A) in the impugned order, in a detailed discussion vide paras 3 and 4 of the impugned order held that the ITO was not justified in clubbing the income of M/s. Mannalal Nirmal Kumar Soorana Co., to the income of appellant firm as that firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the rider that it shall be allowed on merits after examination by the ITO. 4. As regards ground No. (v), the addition was made at the assessment stage for the reasoning as contained in paragraph 20 of the assessment order, since the Department had found cash amounting to Rs. 1,63,000 at the premises of the appellant. The appellant explained that Rs. 2,50,000 were withdrawn from the bank on1st May, 1979and out of this amount Rs. 90,000 had been sent toBombayand deposited in a bank there. A certificate from the Bombay bank which is dt.,14th July 1979evidencing the deposit in the file of the Revenue. In fact, on 2nd June, 1979 when there was a search and seizure operation at the business premises as also the residential premises of assessee the very stand was taken but the ITO having not accepted the assessee's stand and the explanation, made an addition of Rs. 1,59,000 in the income of Shri Mannalal Soorana, partner of the assessee firm and Rs. 90,000 in the hand of the appellant- assessee. The ld., CIT(A) held that the assessee has adduced sufficient evidence to prove that the amount of Rs. 90,000 was a part of the amount of Rs. 2,50,000 withdrawn by the assessee firm from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction on amounts of Rs. 2,200 Rs. 700 Rs. 450 and Rs. 10,000 was also not seriously pressed, hence these, also stand rejected. 8. The next common grievance is disallowance out of travelling expenses which stands at Rs. 11,870 along with claim for weighted deduction under s. 35-B of the Act. The ld., lower authorities are very categorical that about this tour, the assessee has not placed on their file any evidence to evidence it to be a business tour and in the face of categorical finding of two ld., lower authorities, we are not inclined to interfere in the impugned order of the ld., CIT(A) on this issue. In fact, we adopt as our own, the reasoning of the ld., assessing officer on the issue which on facts does not support the assessee's case. Disallowance of Rs. 11,870 out of foreign tour expenses stand sustained and the claim of weighted deduction thereon under s. 35B of the Act as a natural consequence to the above also fails. 9. As regards disallowance out of legal fees which includes travelling expenses of the counsels, suffice it say that under s. 80-vv of the Act. The disallowance has been made justifiably on facts and in law, since the expenditure incurred by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re which would attract s. 145(2). The assessee also relied on the earlier history of his case where book results have always been accepted. The assessee further clarified that the excess sales estimated by the assessing officer which comes to around Rs. 8,00,000 raise two presumptions viz., that the assessee had made these sales in India; and (ii) the sales made in the course of export out of India are not recorded in the books of accounts, but neither can be proved specifically in view of the past history of the case, more so, when all the sales are completely vouched and these were negotiated through bankers. Estimate of sales was assailed and as an alternate plea it was contended that in view of the shortcomings as pointed out by the assessing officer, the shortage could be in the vicinity of Rs. 5,000 or odd. Reliance was placed on the observation of the assessing officer on page 10 of the impugned assessment order and further on the specific issue about no incriminating evidence or document having been found during the search and seizure operation. Before us also the same stand has been taken and assessee's re-joined on the issue as placed at pages 5 and 6 of assessee's paper- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the Stock Register was given for manufacturing to one Shri Kailashchandra Kothari. Silver jewellery and ornaments 2579 pieces were given to one Shri Nilmani for setting the stones. As such, there was no difference whatsoever." 12. We having heard the parties at length and after perusal of the orders of the ld., lower authorities and assessee's paper-book are of the opinion and do hold accordingly that the facts of the assessee's case did not warrant application of s. 145(2) of the Act inasmuch as with an accepted history, it cannot be held that the correctness or the completeness of the accounts of the assessee was not satisfactory or also that no regular method of accounting had been employed by the assessee in as much as the assessee has been valuing the stock as also keeping the accounts on the same lines as in the lines as in the past. exchange conversion rate has always been adopted by the firm in a particular manner and the same was adopted for the assessment year under appeal i.e., as had since been adopted by the assessee in the past. There is another aspect of the case and it is that this year there have been no purchases, but sale of the opening stocks and the to ..... 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