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2016 (1) TMI 744 - ITAT LUCKNOWAddition on account of difference in purchases as shown by the assessee in its trading account and as shown in the books of M/s. Escorts Tractor Ltd - CIT(A) deleted the addition - Held that:- The action of the Assessing Officer of rejecting the claim of the assessee regarding the purchase return and making addition of entire amount as income of the assessee is without any basis because the purchase return of this amount, as claimed by the assessee, has been duly confirmed by M/s Escorts Ltd. being the seller and all the differences pointed out by the Assessing Officer have been duly reconciled as per categorical finding of CIT(A) in his order and none of these finding of CIT(A) could be controverted by Learned D. R. of the Revenue. We also feel that this objection of the A.O. that the Debit Notes are on plain paper loses its significance once the fact of purchase return is confirmed by the seller i.e. M/s Escorts Limited. The objection on the basis of this allegation that there is no evidence of actual movement of tractors on purchase return is also not significant in view of confirmation by the seller i.e. M/s Escorts Limited. Moreover, it was also explained that purchase return of 1001 tractors and subsequent purchase of same tractors was affected in view of some amendments in VAT rules and in view of this, actual movement is not necessary at least for Income Tax Purposes. Objection may of VAT authorities if the VAT rules require actual movement but even in that situation, the claim of purchase return cannot be rejected when both parties are confirming and there is no evidence of sale outside books or closing stock - Decided against revenue Addition on account of carrier fuel expenses and repair & maintenance expenses - rejection of books results - - CIT(A) deleted the addition - Held that:- In the present year, the fuel expenses is 36.87% and repairs and maintenance expenses is 6.32% and the same was 40.68% and 4.51% in assessment year 2006-07 and 44.38% and 5.58% in assessment year 2007-08. Since the expenses claimed by the assessee in the present year is at par with such expenses in preceding two years and no adverse material has been brought on record by the Assessing Officer for making this disallowance and the same was made on this arbitrary basis that the payment was not made by the assessee by ignoring the explanation of the assessee that the payment was made by sister concern by debiting the account of the assessee firm, we find no reason to interfere with the order of learned CIT(A). - Decided against revenue
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