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Issues involved:
1. Disallowance of expenses related to Mehta Sukhadi and tanker bharai. 2. Estimation of income from tanker by the Assessing Officer (AO). 3. Disallowance of vehicle and telephone expenses by the AO. 4. Addition of Rs. 90,000 by the AO based on accounting method. 5. Disallowance of interest income from sister concern. 6. Charging of interest under section 215 of the Income-tax Act. Detailed Analysis: 1. The first issue pertains to the disallowance of expenses related to Mehta Sukhadi and tanker bharai. The AO disallowed these expenses, citing section 40A(3) of the Income-tax Act. However, the CIT(A) examined the facts and upheld the claim of the assessee based on a previous Tribunal order in favor of the assessee. The Tribunal found no flaw in the CIT(A)'s decision, thereby rejecting the Revenue's appeal on this ground. 2. The second issue involves the estimation of income from the tanker by the AO. The AO's method of estimation was deemed unreasonable and arbitrary by the CIT(A) as it did not consider the depreciation of the tanker. The CIT(A) corrected this error and reduced the estimated income, leading to the deletion of the addition made by the AO. The Tribunal criticized the AO's approach as perverse and upheld the CIT(A)'s decision, dismissing the Revenue's appeal. 3. The third issue concerns the disallowance of vehicle and telephone expenses by the AO. The AO made disallowances based on flawed logic and arbitrary assumptions. The CIT(A reduced the disallowances after considering the facts and previous year's assessment order. The Tribunal found no merit in the AO's reasoning and upheld the CIT(A)'s decision, dismissing the Revenue's appeal on this issue. 4. The fourth issue relates to the addition of Rs. 90,000 by the AO based on the assessee's accounting method. The AO disregarded the assessee's regular accounting practice and made the addition without proper justification. The CIT(A deemed this addition unjustified and deleted it. The Tribunal agreed with the CIT(A)'s decision, highlighting the AO's arbitrary actions and dismissing the Revenue's objection. 5. The fifth issue involves the disallowance of interest income from the sister concern by the AO. The AO made an addition based on incorrect findings despite evidence provided by the assessee. The CIT(A corrected this error, and the Tribunal criticized the AO's arbitrary actions, emphasizing the abuse of powers. The Tribunal dismissed the Revenue's appeal on this ground. 6. The final issue pertains to the charging of interest under section 215 of the Income-tax Act. The CIT(A) noted discrepancies in the assessment order and the demand notice, leading to the deletion of the demand. The Tribunal highlighted the arbitrariness in the AO's actions and upheld the CIT(A)'s decision, finding no merit in the Revenue's appeal. In conclusion, the Tribunal dismissed the Revenue's appeal on all grounds, emphasizing the arbitrary and unjustified actions of the AO and supporting the CIT(A)'s decisions based on a thorough examination of facts and legal provisions.
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