R T BALASUBRAMANIAM Vs. INCOME TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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(1.) THESE appeals filed by the assessee are against the common order of the D.C. (Appeals) dated 23-10-1990 for the assessment years 1985-86 to 1988-89. Since a common point is involved in these appeals, they have been disposed of by a consolidated order for the sake of convenience.
(2.) The assessee is an individual engaged in the business of purchase and sale of cotton. The returns of income were filed on 14-6-1989 admitting the following incomes :
As these returns were filed belatedly notices under Section 148 were issued to the assessee and the cases were posted for hearing. Shri V. Ramachandran ITP, appeared on the date of hearing and produced the books of account. He stated that the returns already filed on 14-6-1989 may be treated as returns filed in response to the notices issued under Section 148. The books of account had been examined by the Assessing Officer. The Assessing Officer observed that the purchases of kappas were properly supported by invoices and bills were made for sales, that the drawings of the assessee were poor when compared to the size of this family that some of the commission payments for purchases and sales effected were not capable of verification and that travelling expenses were on the high side in view of the fact that purchases and sales were made locally. In view of the above deficiencies, he made estimated additions in the following manner to cover the aforementioned defects:
Aggrieved by the said additions, the assessee preferred appeals before the DC (Appeals).
In the grounds of appeal filed before the DC (Appeals) it was contended that the Assessing Officer erred in stating that the assessee was doing business locally, that the assessee approached Andhra and Karnataka merchants to effect purchases and sales, that cotton business was mainly based on commission payments when effecting purchases and sales and that travelling expenses were not high when compared to the turnover of the relevant years. According to the DC (Appeals), at the time of the hearing of the appeals the assessee's counsel Shri V. Ramachandran, ITP, had pleaded that though the assessee's case was a case for addition for all the assessment years under consideration, the additions made were excessive. The DC (Appeals) dismissed the appeals by observing as under :
I have considered the representations made on behalf of the appellant and also verified the records. On a perusal of the records it is found that the AR has agreed for additions for all the four years on behalf of the appellant and he has also signed on the order sheet of the relevant order sheets for having agreed for the additions proposed by the ITO. As per Section 246(1) any assessee aggrieved by the orders of the Assessing Officer may appeal to the DC (Appeals). In the appellant's case it cannot be said that he is aggrieved as the additions made by the ITO were agreed by the AR of the appellant whose actions are binding on the appellant. Under these circumstances, the additions are confirmed and the appeals are dismissed.
Against the said common order of the DC (Appeals) the assessee preferred the present appeals before the Tribunal.
(3.) IN the grounds of appeal filed before the Tribunal it was contended that the order passed by the DC (Appeals) was erroneous in law and not sustainable under the facts and circumstances of the assessee's case, that he erred in not considering the various points mentioned by the assessee in the grounds of appeal filed before him, that the assessee was not given sufficient and reasonable opportunity to place all the materials before the Assessing Officer in support of the expenditure claimed by him, that the DC (Appeals) should have held that the additions made by the Assessing Officer were highly excessive and arbitrary, that the expenses claimed by the assessee were quite reasonable considering the smallness of the business and the nature of the transactions, that the drawings were reasonable and fair considering the size and the income of the family members, that the assessee's representative while representing the assessee's case before the Assessing Officer and the DC (Appeals) had failed to bring all the relevant facts to the consideration of the concerned authorities, that the assessee was under the honest belief that the representative would do justice in submitting proper explanations on his behalf, that the additions accepted by the representative were in detriment of his interests and, therefore, could not be sustained. It was accordingly urged that he was an aggrieved assessee and entitled to appeal under Section 246. It was further urged that the representative has acted not in accordance with the intention of the assessee in the appeals. It was accordingly prayed that the order of the DC (Appeals) may be cancelled and justice rendered.;
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