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2019 (9) TMI 1055 - AT - Income TaxAddition on account of low GP shown by the assessee - Sales could be estimated if the books of accounts of the assessee are rejected - HELD THAT:- The assessee has pointed out that accounts of the assessee-company is subject to statutory as well as tax audit, and its books are duly audited and the AO has not rejected the books of accounts. AO has nowhere expressed his inability to deduce true income from the accounts. The assessee has also pleaded that it is a sick company, facing acute shortage of funds and its loan account with consortium of bankers also became NPA; banks have filed recovery suit and they have also assigned the debt of the company in favour of the Asset Reconstruction Company i.e. Asrec India Ltd. AO has only compared certain figures of raw-material vis-à-vis output without comprehending other aspects for consumption of other material as well as achievement of sales. Some of the item may be lying in the closing stock or in semi-finished products. All sorts of such aspects have not been considered by the ld.AO while estimating unaccounted sales. On the other hand, the ld.CIT(A) has appreciated the facts in right perspective and no addition is called for on this issue - Decided in favour of assessee. Addition of power and fuel expenses - assessee was not following proper method of accounting and claiming the expenses as per its benefits - HELD THAT:- AO has not given any reasons for making such a huge disallowance without going into the reasons. Neither any bogus claims have been proved nor it was proved why those store items were to be transferred to CWIP R & D expenses and those were not the revenue expenditures. Merely some items in the preceding year were debited to the CWIP - R & D expenses do not indicate that the same nature of expenditures have been incurred in the year under consideration also. ' Since there was no question on the genuineness of the expenditures and hence there allowability cannot be doubted. When the appellant himself bonafidely transferred some stores and spares expenses to CWIP R & D in the preceding year than in the year under consideration with the same bonafides he has not transferred the same because those were not required to do so. It was the onus on the appellant to disprove the appellant's stand which he has not discharged. Further neither the AO has proved that the expenditures were not made for the purpose of business. In view of the aforesaid discussion, the disallowance made by the A.O. is found not justified and hence same is deleted - Decided in favour of assessee.
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