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TMI Blog2011 (9) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... IT APPEAL NO. 346 OF 2011 - - - Dated:- 20-9-2011 - ARUN MISHRA, NARENDRA KUMAR JAIN-I, JJ. Ms. Parinitoo Jain for the Appellant. JUDGMENT 1. Heard on question of admission. 1.1 The appeal has been preferred by the revenue with respect to deleting disallowance of Rs. 27,85,005/- on account of repairs and maintenance on the basis of net profit rate specifically when the expenses were not supported by evidence. 2. Second question raised is that whether in the facts and circumstances of the case, the Tribunal was justified in deleting addition of Rs. 3,33,151/-, which was paid towards refund of the sales tax? 3. It was also submitted by the learned counsel that in the facts and circumstances of the case, the Tribunal was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the decision of Asstt. CIT v. Allied Construction [2007] 106 TTJ 616/[2008] 26 SOT 50 (Delhi)(URO) came to the conclusion that finding of Assessing Officer has been found to be based on conjectures and surmises. Following is the ultimate finding, after discussions, made by the CIT(A):- Without finding any fault with the audited books of account, without an iota of effort at examination of vouchers that were available to him and without identifying even oneself made voucher or kacha bill that was bogus or fake or that represented a non-business expenditure, he concluded the appellant had tried to "unduly inflate repair and maintenance expenses". This decision, in my considered view, is nothing more than a conjecture or a surmise. The As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before me. The Assessing Officer restricted the claim of sales tax of Rs. 3,74,450/-, by disallowing of Rs. 3,33,151/- being the refund of sales tax received by appellant during the period under consideration. In support to this decision, the Assessing Officer observed, "the assessee has been following mercantile system of accounting, the actual sales tax liability only is to be debited in P L account". I fail to understand this observation and use of the word actual in the context of mercantile system. My understanding is that under mercantile system, the accounting of revenue and expenditure is determined by accrual and not on so-called actual basis. By letter dated 12.01.10, the appellant submitted before me that "as per past pra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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