ITO Vs. H.A. CONTAINERS

JUDGEMENT

(1.) The department is in appeal before us against the order of the learned Commissioner (Appeals) dated 18-1-1999 for assessment year 1995-96. Following grounds have been raised in the appeal :

(2.) The assessee-firm is engaged in the business of transport contract rule This is the first return of the assessee and the income declared is Nil. Despite several notices, none appeared for the assessee in the assessment proceedings and enhance, assessment was completed u/s 144 of the Income Tax Act, 1961 (the Act) determining the total income at Rs. 60,960. Assessee had declared container hire charges at Rs. 6,19,460 and the P&L a/c showed total expenses amounting to Rs. 2,09,403. In absence of books of accounts and details of expenses claimed, assessee (sic-assessing officer) disallowed 20 per cent of the expenses and estimated 20 per cent of the hire charges more than what was declared. Thus, the total addition on account of these two items amounted of Rs. 1,65,772.

(3.) Before the Commissioner (Appeals), it was submitted that due to non-receipt of assessing officer's notices, assessee could not produce vouchers, notices and other documentary evidence. The same were furnished for the first time before the Commissioner (Appeals). It was further submitted that even from the P&L a/c attached with the return of income, it could be patently made out that the expenditure claimed under various heads were ostensibly incidental to the carrying on of the business of transportation. Commissioner (Appeals) observed that assessee's claim did not appear to be inordinate considering the hire charges returned but keeping in view the fact that assessee did not furnish any details, he restricted the disallowance to 10 per cent of the total expenses and deleted the addition of higher hire charges as according to him, there was no basis to estimate the same.