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2012 (11) TMI 1136 - AT - Income TaxAssessment u/s 153A - addition u/s 68 - Held that:- Authorities below could have presumed that the assessee has spent the difference of amount in question somewhere as per cash in hand as per books of account and lesser cash as per seized documents, but that would also not suffice to make addition under any of the above provisions because every person is at liberty to spend their own amount anywhere as per his choice because the assessee has not claimed any deduction in this case. Examining the case of the assessee from every possible angle, we find the addition of ₹ 37,30,710/- wholly unjustified. Purchase of potatoes unexplained - Held that:- In the absence of any incriminating material or evidence against the assessee, we are of the view that the huge addition made against the assessee was merely based on presumption and assumptions of facts, which cannot take place of legal proof. No evidence of purchase, sales or unaccounted stock belonging to the assessee during the course of search or survey was found or established. Thus, the assessee has been able to prove that the assessee acted only as a bailee and earned rental income. Thus, the authorities below have acted against the assessee in haste in making substantive addition without any basis and without considering entire seized material. We, therefore, do not find any justification for the authorities below to make or confirm the addition of the aforesaid nature. We accordingly, set aside the orders of the authorities below and delete the addition. Addition under the head ‘diesel expenses’ - Held that:- The diesel is used in generator, which is necessary for running of cold storage due to frequent failure of electricity in the State of U.P. Therefore, it was necessary component/expense for running the cold storage. Considering the above, it would be reasonable and appropriate to restrict the addition by disallowing 5% of the expenses instead of 10% confirmed by the authorities below. Disallowance of petrol expenses and disallowance under the head depreciation on car for personal user - Held that:- Addition appears to be excessive in nature We, accordingly, modify the orders of the authorities below and restrict the disallowance to 5% of the expenses on both these disallowances of expenses. The AO is directed to disallow 5% of expenses instead of 20%. These grounds of appeal of the assessee are partly allowed. Addition on account of addition under the head ‘building’- Held that:- There were no reasons to discard the books of account merely because the same were not found during the course of survey. The AO should have verified each and every entry from the books of account of the assessee on this issue before making reference to the DVO. However, no such findings have been given and the AO merely because the assessee did not produce bills and vouchers referred the matter to the DVO for estimating cost of construction - restore the matter to the file of the AO with direction to re-decide the issue by considering the books of account produced by the assessee
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