O/TAXAP/1159/2014 ORDER IN HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1159 of 2014 COMMISSIONER OF INCOME TAX III Appellant(s) Versus AMRUT TEXTILES Opponent(s) Appearance: MR SUDHIR M MEHTA, ADVOCATE for Appellant(s) No. 1 CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Date : 17/10/2014 ORAL ORDER (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. This appeal u/s.260A of Income Tax Act, 1961 is filed against order dated 16.05.2014 passed by Income Tax Appellate Tribunal in I.T.A. No.3811 of 2008 whereby, appeal filed by assessee is partly allowed. 2. assessee is firm engaged in business of manufacturing textiles. assessee firm filed its return of income tax for A.Y. 2005 06 showing total income of Rs.2,20,907/ case was selected for scrutiny and thereafter, assessment was framed u/s.143(3) vide order dated 28.12.2007 and total income was determined at Rs.1,42,54,030/ . Aggrieved by order of Assessing Officer, assessee filed appeal before Page 1 of 3 O/TAXAP/1159/2014 ORDER CIT(A), which came to be dismissed vide order dated 11.10.2008. Against said order, assessee filed appeal before Appellate Tribunal. Appellate Tribunal partly allowed appeal whereby, addition was ordered to be made at Rs.20.00 Lacs in trading result of assessee. 3. We have heard learned Standing Counsel Mr. Mehta appearing for Revenue. From record, it appears that for year under consideration, assessee had taken machineries and other facilities of sister concern on rent, which was not case for immediate preceding year. All expenses which were incurred in current year were similar to that of earlier years and that there was no change in actual working except that in preceding year, entries were made for expenses at year end and entry for rent was made separately. There was no change in working of assessee in year under consideration except method of book keeping entries. A.O has not rejected books of accounts of assessee. A.O proceeded on basis of presumption that entire expenses are liable for TDS deduction. 4. In our opinion, Appellate Tribunal was justified in not considering all expenses for disallowance u/s.40(a)(ia) on basis of presumption only as there was no material on record to suggest that change in policy of assessee in taking machines and other facilities of sister concern on rent was fictitious. Further, if entire expenses are disallowed as per claim of assessee, then Gross Profit ratio would work out to more than 35%, as against Gross Profit of 2.91% shown by Page 2 of 3 O/TAXAP/1159/2014 ORDER assessee, which is unrealistic. Considering totality of facts, Appellate Tribunal made addition at Rs.20.00/ Lacs, which, in our view, is just and legal. Hence, no substantial question of law arises in this appeal for our determination. 5. In view of above, appeal is dismissed summarily. (K.S.JHAVERI, J.) (K.J.THAKER, J) Pravin/* Page 3 of 3 Commissioner of Income-tax-III v. Amrut Textile