9911796707
TMI Blog2004 (3) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... return, who has been duly assessed as well. The learned authorised representative relied on the decision of the Supreme Court reported in Jugal Kishore Baldeo Sahai vs. CIT (1967) 63 ITR 238 (SC). The facts of the assessee s case are duly covered by the ratio of the said decision and as such the salary paid is allowable. The ground is rejected. Method of accounting - disallowance of bank bilty commission and interest - HELD THAT:- The assessee in the relevant year has paid the bank bilty commission and interest in respect of the purchase/bills documents as pertaining to the earlier year on their retirement/payment in the relevant year. The same were debited in the books of account on their actual payment in accordance with the consistent me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,90,279 added by the AO. The AO made the trading addition for the reasons given on pp. 2-6 of the assessment order, which included (i) Because the stock register had not been maintained; (ii) Because the inventory of opening and closing stock had not been maintained; (iii) Because the purchase could not be linked with the sales; (iv) Because entries of purchase return written by mistake had not been posted in the ledger; (v) Because the purchases had been entered before the delivery date; etc The AO applied the provisions of s. 145(2), although he did not specifically mention that the books of account are being rejected. The CIT(A) concluded that in view of the reasons mentioned by the AO, the provisions of s. 145(2) are applicable but he d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r cases. In view of our clear-cut finding, there is no need to refer to any other decision relied upon by the assessee in this regard. The ground stands rejected. 4. The next issue pertains to the deletion of disallowance of salary of Rs. 45,000, which was paid to the karta of the assessee-HUF. The assessee is a HUF and a salary of Rs. 45,000 was paid to its karta during the year under appeal. The AO made the disallowance on the ground that there was no valid agreement between the assessee and the karta. From the assessment order, it is not clear as to whether the AO disputed the services rendered by the karta for the purposes of the assessee s business. We are convinced that there was a valid agreement between the assessee and the karta. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to his capital, was also having interest-free deposits with him, as evident from para-11 of the assessment order, wherein he himself has admitted that the assessee had not paid any interest to some parties and named as well. The AO has also admitted that the assessee has paid interest on much lower rate to Rajendra Kumar Surana HUF. Therefore, the assessee was having interest-free funds as well. The case of the assessee is that there cannot be any justification for estimation of the notional interest and making addition/disallowance on the same basis. On the other hand, the learned Departmental Representative has submitted that the assessee has diverted the funds for extraneous consideration to benefit the relatives. To our mind, the findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the AO cannot be allowed to perpetrate. In our opinion, the CIT(A) has rightly deleted the impugned disallowance of Rs. 12,880. We uphold his order on this issue and do not find any merit in the ground raised by the Revenue. 7. The last issue relates to the deletion of disallowance of bank bilty commission and interest of Rs. 51,127. The AO has discussed this issue in paras 12-13 of the assessment order and the CIT(A) in para 11 of the impugned order. The AO disallowed the bank bilty commission and interest, which was claimed to have been paid in the relevant year on the ground that the same was in respect of purchase invoices of the earlier year. The assessee is debiting the bank bilty commission and interest when documents are retir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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