NEMI CHAND KHETMAL,CHABA vs. INCOME TAX OFFICER, PHALODI

The order of the Commissioner of income tax Appeals is against law, weight of evidence and probabilities of the case. 2. The learned Commissioner of Income Tax Appeals has erred in sustaining the additions of Rs.58,50,682 on account of the following- a. estimated income at 8 percent on balance cash credits of Rs. 21,73,842 and b. commission brokerage income of Rs. 36,76,840, without appreciating that the partnership firm was not in existence and had not carried on any business activity during the relevant assessment year. The additions sustained on account of estimated income at 8 percent on balance cash credits and commission income are based merely on suspicion and surmises and are not supported by any cogent material on record, and are therefore unjustifiable.

The learned Commissioner of Income Tax Appeals further erred in sustaining the addition without establishing the ownership of the bank account and without appreciating that the bank account in question did not belong to the partnership firm but to Mr. Nemi Chand, son of Mr. Khetmal Jain, who was operating a proprietary concern in the name and style of M/s Nemi Chand Khetmal Jain. 4. The learned Commissioner of Income Tax Appeals has erred in sustaining the aforesaid additions despite the fact that the transactions had already been offered to tax in the return of income filed by the proprietor, Nemi Chand Jain PAN AAPPC9708A, and the bank accounts were duly disclosed in the financial statements and audit report, thereby resulting in double taxation of the same income 5. The learned Commissioner of Income Tax Appeals has completely ignored the fact that the PAN of the firm was wrongly mapped to the proprietorship entity, M/s Nemi Chand Khetmal Jain, and that the same was subsequently confirmed and corrected by the bank on the request of the proprietor, Mr. Nemi Chand. 6. The learned Commissioner of Income Tax Appeals has erred in upholding the assessment without appreciating that even after making additions of Rs. 58,50,682, no tax has been computed in the demand computation sheet. The computation of total income shows NIL tax payable and the only demand reflected is Rs. 1,000, being a statutory fee, which is independent of the additions made. In such circumstances, the additions sustained are not tenable on facts and in law. 7. For the above ground and such other grounds that may be urged at the time of hearing, the appellant prays that the appeal be allowed. 8. The appellant craves leave to, add to, amend or modify the above grounds of appeal either before or at the time of hearing of the appeal, if it is considered necessary. 5. Ld. Counsel for the assessee submitted that Ld. CIT(A) confirmed the addition made by the AO without establishing the ownership of the bank account and without appreciating the bank account in question did not belong to the assessee. Ld. Counsel further submitted that Ld. CIT(A) dismissed the appeal of the assessee ex-parte as non prosecution, thereby requested to set aside the matter back to the file of Ld. CIT(A) and the assessee undertakes to file the Return Income