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TMI Blog1990 (10) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... he books are lost in fire, is untrue, is wrong and unjustified and based on imagination. (2) that the order of the ITO made under s. 143(3)/148 dt.17th April, 1986, is bad in law, invalid and void as the proceedings under s. 148 are wrongly initiated without complying the provisions of s. 148(2) and so assessment should be annulled. (3) the learned ITO is wrong and unjustified in charging interest under s. 139(8) and s. 217 as the interest is not chargeable at all, because the assessments are not regular assessments under s. 2(40), but completed under s. 143(3)/148. 3. The copy of the said additional grounds of appeal was supplied to the Departmental Representative and the Departmental Representative preferred to submit oral submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was that in regard to the lack of jurisdiction of the Assessing Officer, the assessee had not raised this issue before the CIT(A) nor has he placed the copy of reasons recorded which could perhaps indicate what was in the mind of the Officer for invoking s. 1480. The plea was the argument of the assessee in this regard has to be taken as a mere allegation without adducing of any evidence. In regard to charging of interest under s. 139(8) reliance was placed on the Karnataka High Court decision in the case of CIT vs. Deepchand Kishanlal (1990) 82 CTR (kar) 322 : (1990) 183 ITR 299 (Kar), according to which the latter legislative intent could and should be taken into account for proper appreciation of the legislative provision. 4. On the is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of interest etc. The Explanation that was made to these sections has been made effective from1st April, 1985, and it reads as under: "Where, in relation to an assessment year, an assessment is made for the first time under s. 147, the assessment so made shall be regarded as a regular assessment for the purposes of this sub-section". 6. The reading of this Explanation is unambiguous as it talks of assessment in respect of any assessment order made for the first time under s. 147 and when it is r/w the date of insertion which is 1st April, 1985, it makes all the more clear that "where in relation to any assessment year, an assessment made for the first time under s. 147 the assessment so made after 1st April, 1985, shall be regarded as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well, the assessee had to pay interest of Rs. 38,826, the establishment cost of the assessee is much more than the others, have all been considered by the Assessing Officer though the fact remains that all the cases the product of tobacco was an excellent quality. The relief of 0.5 per cent given by the CIT(A) was on the basis that the Assessing Officer had noted in his assessment that the cases of other tobacco manufacturers and exports are not fully comparable, is a contradiction by the Assessing Officer himself and, therefore, such cases would not have been compared by him. The CIT(A) considered the duplicate copies of the bills recovered by the assessee from the dealers regarding the purchase of tobacco. In support of its plea that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the comparable chart and turnover, the establishment and expenses of the assessee and that of the concerns referred to, other replies to the ITO in this connection and also the basis of filing of the return etc. The emphasis made by the counsel, Shri Kapoor, was that 1977-78 was one exclusive year in which the profitability was better while in the other years it was always in the range of 2 per cent. The plea, therefore, was that the rate of 2 per cent as shown by the assessee was reasonable. 8. The plea of the Deptl. Representative in this connection was that the Assessing Officer had realised that the other cases are not fully comparable, that is why he has not applied the rates shown by the other concerns but had adopted an estimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regards the reasonability of the rate CIT(A), considering the peculiar circumstances as alleged by the assessee that the books were lost in fire, had taken the estimate of margin at 3.5 per cent which is very much less than what was adopted in 1977-78. We see no justification of any further deduction in the estimate so made by the CIT(A) for both the assessment years. We, accordingly, confirm the margin of rate applied by the CIT(A) for both the assessment years. 10. As regards the deletion of cash credit and treating it as possibly covered by the trading additions could not be said to be improper in the circumstances of the case. We confirm the order of the CIT(A) on this issue. On the issue of deletion of the cash purchases, the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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