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2018 (7) TMI 2310 - ITAT MUMBAIEstimation of income - gross profit on alleged purchases made through entry - HELD THAT:- The transactions are duly recorded in the stock register and every purchase can be identified with the corresponding sales. It seems that the addition has been made on the basis of statement tendered by Shri S. K. Bajaj and that statement was retracted on 21/11/2008. The cross examination was never provided to the assessee and the whole addition is based upon estimation only, thus, considering the factual matrix and interest of Revenue, we deem it appropriate to adopt the gross profit @ 0.7 minus already GP declared by the assessee and against 1% estimated by the Ld. AO. Thus, this ground of the assessee is partly allowed. Addition u/s 69C - commission paid on purchase of silver bills - commission was estimated by the Ld. Assessing Officer @0.5%, which may be reduced to 0.2% - HELD THAT:- As it will meet the end of justice, if the commission is estimated at the rate of 0.3%, in place of 0.5% made by the Ld. AO and 0.2% requested by the Ld. counsel for the assessee. AO is directed accordingly. This ground of the assessee is partly allowed. Disallowance being 1/6th of car and telephone expenses and further disallowance at the rate of 15% of entertainment expenses for personal use - HELD THAT:- Vehicles of the assessee company are used as per terms and conditions of the service and since the assessee is a private limited company, it is assessable as a distinct assessable entity, as per the definition of ‘person’ under section 2(31) of the Act. The Hon'ble High Court in Dinesh Mills Ltd [2001 (12) TMI 65 - GUJARAT HIGH COURT] clearly held that it could not be stated that when the vehicles were used by the directors 'even if they were personally used by the directors', the vehicles were personally used by the company, because a limited company by its very nature cannot have any 'personal use'. The limited company is an inanimate person and there cannot be anything personal about such an entity. The view was supported by the provision of section 40(c) and section 40A(5) of the Act. Once the expenditure in question was in terms as provided in sections 309 and 198 of the Companies Act, there could not be any 'non-business' purpose insofar as the assessee-company was concerned. While coming to the aforesaid conclusion, Hon'ble High Court followed the decision from L.G. Ramamurthi [1976 (10) TMI 18 - MADRAS HIGH COURT] No contrary decisions or facts were brought to our notice by the Revenue. Thus, grounds of the assessee are allowed
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