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2019 (9) TMI 1600 - AT - Income TaxUnexplained cash credits - Assessee explained it to be refund in cash of advance paid by cheques to two farmers for purchase of agricultural land on non-materialization of purchase deal - HELD THAT:- The case of the Revenue is based upon the fact that the assessee has paid advance for the purchase of land, which beard the same survey number from two parties from whom advances were received. The case of the Revenue is simply on the basis that refund of advance was made in cash on various date and deposited by the parties in the bank account of the assessee. As perused the balance sheet of the assessee as on 31.03.2008 and observe that the advances given to Shri Mehmudbeg Umergeb Mirza and Shri Amirbeg Umergeb Mirza were outstanding as on 31.03.2007 and were nil on the corresponding date in the current previous year i.e. 31.03.2008. We also observe from the ledger account of these two parties as appearing in the books of the assessee that the advances were refunded on various dates due to cancellation of the purchase agreements. Thus, the case of the Revenue is totally based upon suspicion and presumptions whereas the assessee has proved by way of evidence in the form of copy of balance sheet, ledger account, confirmations/affidavits from the parties who made the refunds. - Decided in favour of assessee. Allowability of Staff Welfare Expenses - addition as made by the AO for providing food to the employees during the office hours in the Ramzan month as not been incurred for the business of the appellant - HELD THAT:- Assessee being a follower of Muslim religion has to incur these expenses in order to motivate the work force - assessment order and the appellate order were passed in a cryptic manner without bringing any facts on record to prove that these were personal expenses of the Directors. The addition was made purely on the basis of grey work of the AO - CIT(A) also upheld the same observing that expenses were incurred in a disproportionate ration and not reasonable. Even if for a moment, if we go by the theory of the Revenue authorities that the expenses are not reasonable, even then the total disallowance is not justified - addition made by the AO is not correct and needs to be reversed.- Decided in favour of assessee. Addition towards excess physical stock over the book stock of the assessee - GP margin on excess of book stocks over physical stocks - HELD THAT:- We find that the assessee is operating from four locations as mentioned hereinabove and has the system of Management Information System in place for accounting of its inventories. The assessee has filed reconciliation explaining the discrepancies in the stocks as noted by the search party. The assessee has also filed before us the various documents and reconciliation explaining the said discrepancies. Moreover, the assessee has explained why the said discrepancies have arisen which are very minor and within norms - As in Balaji Wire Pvt. Ltd. [2007 (8) TMI 7 - HIGH COURT, NEW DELHI] the Hon’ble Delhi High Court has affirmed the order of the Tribunal deleting the addition on account of excess stock calculated by the Revenue - assessee can not be made to suffer from the lethargy of the officers of the revenue when the search party did not find any incriminating evidences - we direct AO to delete the additions on account of excess stock and on account of GP margin on excess of book stocks over physical stocks. - Decided in favour of assessee.
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