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2020 (7) TMI 685 - AT - Income TaxRejection of books of accounts - Trading addition - GP Estimation - HELD THAT:- Assessee has claimed shortage of 0.55% in Petrol during the year as against 0.60% in the past two years and similarly, the assessee has claimed 0.18% in Diesel during the year which is comparable to A.Y 2011-12 and better than 0.20% claimed in A.Y 2010-11. The same provides a more realistic and rationale basis as compared to monthly comparison and will factor-in the climatic and other factors prevailing throughout the year resulting in such shortages. Even where the Assessing officer intends carrying out monthly comparison, then the shortages claimed in the month of June 2011 should have been compared with shortages in the month of June 2010 and likewise, for other month which however, has not been done in the instant case. Comparative shortages for two months is not reflective of any inconsistent claim of such shortages for the whole year and it is even not the case of the Revenue that similar discrepancies are found in remaining months. Shortages so claimed by the assessee are lower than what has been claimed and allowed by the Revenue in past two years for which the requisite data is available on record and therefore, the same being found comparable cannot be form a rational basis for rejection of books of accounts so maintained by the assessee. Rejection of books of account is hereby set-aside and the consequent trading addition is hereby deleted. Disallowance of various expenses - CIT(A) has restricted such disallowances to 10% which is consistent with the disallowances made in the past years and which has been accepted by the assessee. In the result, we are not inclined to interfere with the findings of the ld CIT(A) and the same is hereby confirmed. Disallowance of salary expenses - claim of the assessee is that the same is fully verifiable for ESI, PF records and has been duly offered to tax, where applicable in their personal tax returns. The matter is accordingly remitted to the file of the Assessing officer to verify the same and where the same is found to be in order, allow the necessary relief to the assessee.
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