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2018 (9) TMI 704 - AT - Income TaxAddition made on account of personal and unverifiable expenses - Held that:- Assessee has produced bills in support of foreign travel expenses incurred by it. Further it is observed that foreign travel has been undertaken by Directors or other officials alone, and A.O. has not been able to establish any infirmity/discrepancy in evidences filed by assessee. CIT(A) categorically observed that assessee provided Ledger account of telephone expenses which contained telephone numbers and mobile numbers of assessee, having installed, either at factory, or offices, or mobiles, used by directors/senior officers. Regarding local travel expenses, CIT (A) categorically observed that Ledger account does not indicate any personal expenditure. In respect of vehicle running expenditure and depreciation is concerned, it has been observed by CIT (A) that assessee itself has made suo moto disallowance on account of perquisite value for use of vehicles for personal reasons in the computation of income. Disallowance being restricted under section 36 (1) (iii) - Held that:- Having regard to balance sheet of assessee for year under consideration, assessee had sufficient funds of its own, and therefore presumption by Ld.AO without any supportive documents/evidences is unacceptable. Referring ratio held by Hon’ble Supreme Court in case of Hero Cycles Pvt.Ltd Vs.CIT [2015 (11) TMI 1314 - SUPREME COURT OF INDIA], we do not find any infirmity in the decision of Ld. CIT (A). However at this juncture we direct Ld.AO to allow the netting of interest. Accordingly, this ground raised by revenue stands dismissed. Disallowance on account of under valuation of closing stock - Held that:- CIT(A) categorically observed mistake in valuation of closing stock adopted by AO by using FIFO method. It is observed that Ld.AO has not granted adjustment of opening stock and slow moving items, which has been held to be unjustified by plethora of decisions. On the basis of the above detailed observations by Ld. CIT (A), we do not find any infirmity in deleting addition made by Ld.AO. Ld.AO is directed to value closing stock after eliminating opening stock for the year, slow moving & obsolete items at cost price or market price whichever is lower. - Decided against revenue
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