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TMI Blog2004 (10) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... d CIT(A) has erred in confirming the disallowance of the debit of the net representative liability amounting to Rs. 9,31,512 in parties suspense account; thus increasing the total income for the block period by this amount. He has done this despite the fact that the Assessing Officer had clearly admitted about the correctness of the liabilities and about the same having been worked out from the seized material itself (please refer line 11 of the last para of page No. 8 and line 4 on the first para of p. 9 of the Assessing Officer in this regard.)" 3. Briefly stated, the facts of the case are that the assessee is engaged in the business of brokerage of iron and steel scrap and the assessee procures materials from various consignors i.e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree parties for a sum of Rs. 3,78,952 and after deducting this amount from the net amount of Rs. 13,60,464, the Assessing Officer has added back a sum of Rs. 9,81,512 by rejecting the claim of the assessee that this amount is payable by the assessee to the third parties because the assessee could not produce any confirmation from these parties or any other evidence in this regard that this sum is payable by the assessee. On appeal, the learned CIT(A) upheld the action of the Assessing Officer by holding that the transactions contain traces of actual purchase and sale also because in some cases, the assessee has made payment to the seller from his own fund. Learned CIT(A) also stressed upon absence of any corroborative evidence in this regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arty-wise ledger and in absence thereof, the claim of the liability payable by the assessee is not acceptable. It was also contended that no confirmation from the parties or any corroborative evidence has been brought by the assessee with regard to this claim of liability; and hence, the same is not allowable. 6. We have considered the rival submissions and perused the material on record. We find that there is debit balance of Rs. 14,50,441 as per page No. 49 of the paper book for the party M/s. N.C.K. Sons, but the balance of this party i.e. , N.C.K. Sons is considered on page No. 46 of the paper book as credit balance of Rs. 2,33,783. We find that on page No. 50 of the paper book, the amount of Rs. 16,84,224 claimed to be payable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of NCK Sons in the books of the assessee into credit balance. Same is the case about page Nos. 80 and 81 of the paper book and hence, we are of the view that in the interest of justice, this matter should go back to the Assessing Officer to examine the seized records in detail and then decide the issue afresh by either accepting it as a whole or by rejecting it as a whole; and accordingly, we set aside the order of the learned CIT(A) and restore the matter back to the file of the Assessing Officer with the direction to examine the claim of liability of the assessee with seized materials and decide the issue afresh by either accepting it as a whole or by rejecting it as a whole and then pass necessary order as per law. The Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 17th October, 1997, for which seized books are found is 47.82 per cent, whereas, the percentage of claim by the assessee for 1st January, 1995 to 9th October, 1995 is only 43.36 per cent as per details available on page Nos. 32 and 33 of the paper book; but the same was disallowed in part by the Assessing Officer. 10. It was submitted by the learned Authorised Representative of the assessee that the Assessing Officer has allowed the deduction of expenses in proportion to period of time, whereas, the assessee has claimed the same in proportion to value of gross income. It was submitted that expenses should be allowed in proportion to value of gross income; and hence, the disallowance made by the Assessing Officer should be deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer for the reason that claim does not arise from the seized books and is not supported by evidence. Under these facts and circumstances, we are of the considered opinion that some expenses, which are of fixed nature such as miscellaneous expenses, salary expenses, taxi rent expenses should be allowed on the basis of pro rata time period; whereas the other expenses, which are of variable nature should be allowed on the basis of pro rata of gross income. Regarding the total disallowance made by the Assessing Officer for the expenses on account of car finance expenses, business expenses, depreciation on car and scooter, we are of the considered opinion that in the interest of justice, the assessee should be given one more ..... X X X X Extracts X X X X X X X X Extracts X X X X
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