- (1.) The present appeal has been filed by the Revenue under Section 260A of the Income Tax Act (hereinafter referred to as the said 'Act') against the order dated 31.10.2008, passed by the Income Tax Appellate Tribunal, Jaipur Bench 'A' Jaipur (hereinafter referred to as the 'Tribunal) in ITA No. 305/JP/2008 and C.O. No. 26/JP/2008.
(2.) The facts giving rise to the present appeal are that the respondent Assessee firm was engaged in the business of manufacturing and trading of Hawai Chappals, Canvas shoes etc. The said firm was assessed for the Asstt. Year 2004-05 by the Assessing Authority, who vide order dated 28.9.2006 rejected the books of accounts of the Assessee and made a trading addition of Rs. 14,91,017 and of Rs. 3,86,552/- in respect of Delhi Branch office. Assessing Officer also disallowed Rs.11,27,898/-, out of the sales commission/discount and also disallowed certain other expenses on lump sum basis. Being aggrieved by the said order, the respondent had preferred an appeal before the Commissioner of Income Tax(Appeals)-III, Jaipur, who vide the order dated 26.11.2007 partly allowed the said appeal. The Revenue therefore, preferred the ITA being No. 305/JP/2008 and the respondent assessee filed cross-objections against the said order passed by the CIT(A) before the Tribunal. The Tribunal vide order dated 31.10.2008 , dismissed the appeal of the Revenue and partly allowed the cross-objection of the respondent assessee . The Department, therefore, has preferred the present appeal before this Court under Section 260A of the said Act.
(3.) It has been submitted by learned counsel Mr. Sameer Jain for the appellant that CIT(A) as well as the Tribunal had materially erred in law in not confirming the order passed by the Assessing Officer invoking the provisions contained in Section 145(3) of the said Act, more particularly, when the books of accounts of the assessee were found to be defective. Pressing into service the provisions of Section 145(3) of the said Act, the learned counsel submitted that where the assessing officer was not satisfied about the correctness of the accounts of the assessee, the Assessing Officer was required to make an assessment in the manner provided in Section 144 and that in the instant case the Assessing Officer having invoked Section 145(3) of the said Act, on he having not been satisfied with the correctness of the books of accounts of the assessee, the CIT(Appeals) and the Tribunal ought to have confirmed the said order of A.O. He also submitted that the Tribunal had also erred in law in allowing the deduction on personal uses of various assets claimed by the respondent in its books of accounts.;