9911796707
TMI Blog1991 (11) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... ela-walas amounting to Rs. 4.05p and Rs. 8 was not recorded. After hearing both the sides and perusing the material on record we are of the opinion that this cannot be sustained. We find that the Assessing Officer has mentioned in the order that the purchase and sales of these petty items were verifiable. If the assessee did not record these petty commission, which in any case would not work out to more than Rs. 1,500 for the year, on the ground that commission on these petty sales are given to the employees for their entertainment, in our opinion could not be treated as assessee's income. We find that himself in para 7.1 and para 8 of his order deleted some additions on the ground that the assessee cannot be forced to charge commission from his customers and if commission was not received it could not be treated as assessee's income. In this case it is admitted by the Assessing Officer that sales/purchases on which this commission was worked out were recorded in regular books and these petty commissions were noted in the day book. In these circumstances, we hold that the explanation of the assessee in reasonable that these petty amounts were spent on the entertainment of the emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear and mere book entries could not be taken as investment. In fact several entries showed "baakio in the beginning and hence could not be said to be investment in the financial year. He submitted that it was not a case where the assessee had denied all the books to be his. Those books which belonged to the firm were owned by it. He finally submitted that even if it is accepted that they represented entries regarding outstandings and recoveries of assessee as a commission agent on behalf of his constituents and then it would not be assessee's investment. 4. While making this addition of Rs. 48,378 the Assessing Officer had further estimated that assessee had invested Rs. 1,50,000 in earlier years in the past in which he has invested Rs. 28,104 this year, Rs. 90,000 in the past in which he has invested Rs. 20,274 this year and thence must have earned Rs. 22,500 and Rs. 13,500 respectively as interest on those investments made this year. Thus a further addition of Rs. 41,000 was made for interest on these investments. Shri Agrawal strongly refuted these allegations and submitted that there was no evidence nor was it a fact that assessee ever carried on any money-lending business an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objection of the assessee is against an addition of Rs. 3,900. The Assessing Officer found that in the account of a constraint a figure "3500 Byaaj" was written and this was not accounted for by the assessee. After having considered the rival submissions we hold that this addition cannot be sustained. It is admitted by the Assessing Officer that other entries of this account tally with entries in assessee's other books of account. As per the decision of the Hon'ble Supreme Court in the case of CIT vs. Shoorji Vallabhdas Co. (1962) 46 ITR 144 (SC) a mere entry in the books of account cannot be treated as income. Moreover, we have seen in photocopy filed before us and we find that it is the first entry on the Dr. side below which there are Dr entries starting from 3rd Jan., 1984 of Rs. 13,422.90 p. On the credit side first entry is dt. 25th Jan., 1984 of Rs. 15,000. We agree with Shri Agrawal that it could not be the entry of interest for this year. We also agree with him that when the assessee is not charging interest from any other constituent, there is no reason why it would charge only from this one constituent. Accordingly, this addition of Rs. 3,500 is deleted. 7. The Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments in the abovementioned diary is also directed to be deleted. 10. In Ground No. 7, the assessee has objected to an addition of Rs. 4,356 + Rs. 22,452 being the amounts of losses claimed against one Sh. Khiyaram. The Assessing Officer rejected assessee's explanation that since this amount could not be recovered from Shri Khiyaram, it was debited to Onion Purchase A/c. Shri Agarwal explained that it was in the course of regular business and should be allowed, We, however, do not find force in his arguments and agree with the learned Departmental Representative. If Rs. 4,356 was a claim of bad debts the assessee had to prove it to the satisfaction of the ITO but no evidence to support that it was a bad debt was filed and hence this disallowance of Rs. 4,356 is upheld. 11. Along with the same objection is an objection contained regarding a loss of Rs. 22,452 claimed to be incurred in the course of a joint venture with Shri Khiyaram. Shri Agarwal explained that the copy of account of Shri Khiyaram shows that purchases of onion to the tune of Rs. 2,38, 694 were made, the payments of which were generally made by cheques. The total sale precedes as given on page 114 of the paper bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not automatically mean that it reflects the transactions of the firm. There does not appear to be any prohibition on the use of the stationery of the firm by its partners. Shri Shobhrajmal had, in his statement on oath, denied that it belonged to the firm. The paper was discovered from the residence of the partners and there is no evidence brought on record by the Revenue to disprove what is contended by the assessee and by Shri Shobhrajmal in his statement on oath. Hence, this addition of Rs. 10,000 is directed to be deleted. 13. There is a similar objection regarding addition of Rs. 3,000 and estimated interest of Rs. 90 on that amount. This addition is based on a pronote dt. 17th Oct., 1984 executed by one Zulfikar Ramzan Ali. The assessee had stated in his written reply that it was found from the room of Nanakram, a son of Sh. Shobhrajmal, who was doing his separate and independent business in Kanpur. Moreover, this paper is on the letter-head of one Kisan Trading Co. Whereas it is executed in Gujarati, the name of the assessee firm is written in English. Shri Shobhrajmal in his statement on oath had denied any knowledge about this paper also. As rightly pointed out by Shri A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has, however, estimated the sales at Rs. 7,00,000 and has applied a gross profit rate of 5 per cent. This year, assessee has shown sales of garlic at Rs. 56,013 and has shown a gross profit rate at 9.19 per cent. Last year, there were no sales of garlic. The Assessing Officer has estimated the sales at Rs. 60,000 and gross profit rate at 10 per cent. All this has resulted in trading additions of Rs. 37,301, which is challenged by the assessee. The learned counsel for the assessee referred to the decision of the Hon'ble Supreme Court in the case of State of a Orissa vs. Maharaj Shri B.P. Singh Deo(1970) 76 ITR 690(SC) at 691 where their Lordships have held that the basis of estimate should be known. He argued that when the assessee has to recover amounts from other parties which are shown in the books of account, there was no justification for enhancing the sales. Moreover, the sales this year were better and more than last year and there was no justification for making additions. In the alternative, the learned counsel submitted that the additions were excessive and should be reduced. 17. After hearing both the sides and perusing the order of the Assessing Officer, we agree wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
