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2015 (11) TMI 1680 - AT - Income TaxClaim for applying the provisions of section 44AF - Held that:- As observed from the Trading and Profit & Loss A/c. of the assessee that although the amount of ₹ 39.82 lakhs is credited on account of sales, the same is a net amount after deducting expenditure incurred by the assesese on turnover tax and VAT. Since what has to be taken into consideration for applicability of section 44AF is gross turnover and the same is more than ₹ 40 lakhs, as is evident from the Profit & Loss A/c., it is of the view that the provisions of section 44AF are not applicable in the case of the assessee, as rightly held by the authorities below. - Decided against assessee. Addition on account of under-valuation of stock - Held that:- As observed that the last purchase of aluminium, as pointed out by the Assessing Officer, was made by the assessee on 27.02.2006 @ ₹ 181/- per kg. Moreover, the assessee by his own admission was dealing with wide variety of aluminium products and in the absence of any product wise details maintained by him, it is difficult to apply the rate of one product to value the closing stock of the assessee. It is also worthwhile to note here that the rate of ₹ 99.65 per Kg. was indicated by the assessee himself as the scrap value of products and it is, therefore, difficult to accept the claim of the assessee that the market value of the aluminium products dealt with by him was only ₹ 111/- per kg. On the other hand, the method followed by the Assessing Officer for valuation of closing stock, in my opinion, is more scientific as he has taken into consideration the average cost of opening stock as well as the average cost of products purchased by the assessee during the year under consideration and by following FIFO method, he has determined the value of closing stock of the assessee, which in the facts and circumstances of the case cannot be found with any fault. - Decided against assessee. Deduction claimed by the assessee on account of expenses incurred on reconstruction of house/godown - Held that:- As submitted by the the assessee, a similar deduction claimed by the assessee, however, is allowed by the Assessing Officer himself in the earlier years as well as in the subsequent years even in the assessment completed under section 143(3) and since the ld. D.R. has not been able to dispute this position, we decide this issue in favour of the assessee. Addition on account of rent - disallowance made by the authorities as the building being under construction, the same could not have been used by the assessee for the purpose of business - Held that:- As rightly contended by the assessee, the expenditure in question was undoubtedly incurred by the assessee for the purpose of his business in order to retain his right over the building for use of the same in future for the purpose of business. Accordingly, we delete the disallowance. - Decided in favour of the assessee. Addition on account of expenses incurred by the assessee for maintenance of elevators - Held that:- As it is observed that the said expenses were incurred by the assessee in respect of his residential house and in the absence of any evidence produced by the assessee to show that his residential house was used for the purpose of business, find no justifiable reason to interfere with the impugned order of the ld. CIT(Appeals) confirming the disallowance made by the Assessing Officer on this issue.- Decided in favour of the revenue. Disallowance of 10% made out of car expenses and depreciation claimed by the assessee - Held that:- In the absence of any record maintained by the assessee to show that the car was exclusively used for the purpose of business, disallowance to the extent of 20% out of the car expenses and depreciation was made by the Assessing Officer for involvement of personal element. On appeal, ld. CIT(Appeals) found the same to be excessive and restricted the same to 10%. The disallowance sustained by the ld. CIT(Appeals) to the extent of 10% of the car expenses and depreciation is fair and reasonable and upholding his impugned order on this issue, I dismiss Ground of the assessee’s appeal.
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