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2022 (9) TMI 1245 - ITAT SURATRejection of books of accounts - estimation of gross profit - HELD THAT:- CIT(A) noted that there is force in the arguments of the assessee that there is no fall in the GP of the post survey period. Assessee has shown overall GP of 17.14% as per tax audit report during the year under consideration and even otherwise, if the GP re-worked by the Assessing Officer is considered after adding the disclosure income which is business income in nature, and the GP ratio shall be Rs. 14.23% and the same is reasonable and in lines with average GP of succeeding years. Hence, ld CIT(A) considering these facts deleted the addition of Rs.3,51,57,284/- on account of low gross profit. We do not find any error in the above conclusion reached by ld CIT(A), hence we concur with findings of ld CIT(A) and dismiss the ground raised by the Revenue. Under valuation of excess stock found during the course of survey - HELD THAT:- CIT(A) observed that survey team has made a detailed working of valuation quality wise which was confronted to the assessee and on the basis of such efforts by the survey team, the declaration could be made. AO cannot be expected to brush aside the valuation done by survey team to enhance the valuation without pointing out any defect in the valuation done by survey team. CIT(A) held that there is force in the argument of the assessee that the issue of valuation is revenue neutral in as much the value of closing stock on the date of survey becomes the opening stock of the post survey period and the same is captured either in Sales with profit margin or in closing stock at same value and hence there is no effect on the profit and loss account per se - CIT(A) deleted the addition correctly - dismiss the ground raised by the Revenue. Addition on account of under valuation of chemical stock - HELD THAT:- AO cannot dictate the assessee to follow a particular method of valuation of closing stock without citing any cogent reason to do so. The assessee is consistently following the method of valuation in subsequent years also and the closing stock of colour and chemicals shall become the opening stock of the next year and hence there is no incentive for the assessee to choose a particular method. Hence, based on this factual position, ld CIT(A) deleted the addition - We note that ld CIT(A) has passed a reasoned and speaking order therefore we do not find any infirmity in the conclusion reached by him, hence we confirm the findings of ld CIT(A) and dismiss the ground raised by the Revenue. Addition on account of unaccounted purchase - CIT-A deleted the addition - HELD THAT:- CIT(A) observed that there is no mismatch as worked out by the AOr. AO has also not given any other evidence which proves that assessee has made any unaccounted purchases - CIT(A) deleted the addition Correctly. Based on the factual position stated above, we confirm the findings of ld CIT(A) and dismiss the ground raised by the Revenue. Unexplained cash credit - CIT-A deleted the addition - HELD THAT:- Unsecured loans from all the lenders as cash credit based on wrong appreciation of facts and law, hence ld CIT(A) has rightly deleted the addition - We confirm the findings of ld CIT(A) and dismiss the ground raised by the Revenue. Nature of expenses - repair and maintenance of building - Unexplained capital expenditure - HELD THAT:- We note that assessee submitted various vouchers and bills relating to bajri, retti and cement expenses and we note that these expenses are incurred by the assessee for the purpose of current repairs and maintenance, hence such expenditure does not fall in the domain of capital expenditure, therefore we direct the Assessing Officer to treat it as revenue expenditure. Addition on account of late payment of PF and ESIC - HELD THAT:- We are of the view that the issue may be remitted back to the file of the Ld. CIT(A) to decide the matter after taking into account the judgment of the Hon'ble Supreme Court as and when will be passed by the Hon'ble Supreme Court. Therefore, this appeal at this stage is dismissed. However, if the Supreme Court reverses the judgment in the case of the Hon`ble Gujarat High Court in the case of CIT vs. GSRTC [2014 (1) TMI 502 - GUJARAT HIGH COURT] it would be open for the assessees to revive this appeal by filing an application for such purpose within three months from the date of the judgment.
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