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2021 (5) TMI 655 - AT - Income TaxAddition for sale of sarki khalli - as alleged assessee has not having any such stock - HELD THAT:- We on perusal of the records find that assessee purchased sarki khalli from Vishnu Oil Industries vide Bill No.26 dated 27.2.2010. Goods were received 10 days prior from 17.2.2010 by Poonam Road Lines. So the assessee had stock of sarki khalli as on 17.2.2010 but since the bill was entered on 27.2.2010 there was a negative stock appearing in the quantitative details. The negative stock appeared since the Accountant entered the stock on 28.2.2010. Has it been made on 27.2.2010 there would have been no negative stock. This fact is discernable from the paper book. Thus in our considered view this is not a discrepancy and no addition was called for on account of sales without stock in hand. Addition on account of quantity loss of soyabean oil - HELD THAT:- As we find that in the quantitative details the assessee has claimed loss of 26.85 quintal. Ld. A.O made addition for ₹ 1,20,825/- for the alleged loss of 26.85 quintal for the reason that the assessee had not given necessary reply. However on perusal of the Audit Report we find that this loss was very well reported in the Tax Audit Report which is placed at page-23 of the paper book at Annexure- III to the Audit Report. The details shows that the assessee had opening stock of soyabean oil at 796.8 quintal and purchase during the year is 49946.96 quintal and sale during the year is 49139.25 quintal. The loss of soyabean oil is merely 0.05% of the total soyabean oil sold during the year which is in consonance with the business activity consistently carried out by the assessee. In these given facts no addition was called for the quantity loss in soyabean oil . Thus Ground No.1,2 & 3 of the assessee’s appeal are allowed. Addition for estimated Gross Profit by rejecting the book results - HELD THAT:- Since the additions made by the Ld. A.O for the alleged discrepancies noticed in the books of accounts have already been deleted by us there remains no basis for the Ld. A.O of rejecting the book results since there is no plausible reason left to reject the book results. Whatever discrepancies were noticed have already been dealt by us and the addition so made have been deleted and in the given facts and circumstances of the case where the assessee has maintained regular books of accounts with quantitative details, the action of rejecting the book results u/s 145(2) of the Act is held to be incorrect and thus no addition for estimated Gross Profit is called for. Thus Ground No.4,5,6&7of the assessee’s appeal are allowed. Addition for household expenses - AO has estimated the household expenditure at ₹ 70,000/- per month totaling to ₹ 8,40,000/- for the family of the assessee consisting of 9 major members and 3 grand children - HELD THAT:- Looking to the facts and circumstances of the case and being fair to both the parties and in absence of complete household expenditure details which have not been filed by the assessee, are of the considered view that the household expenditure of ₹ 40,000/- per month totaling to ₹ 4,80,000/- would be sufficient to cover up the household expenses incurred by the assessee. As the assessee has shown household expenses of ₹ 2,21,000/- (which includes ₹ 72,000/- withdrawal shown by the assessee and the remaining by other family members) the shortfall would be ₹ 2,59,000/- which is directed to be added to the income of the assessee. Thus Ground No.8 is partly allowed and addition for household expenses is sustained at ₹ 2,59,000/-
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