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2019 (12) TMI 670 - ITAT MUMBAIAddition on account of closing stock - HELD THAT:- Material on record including the tax audit report, original return as well as revised return, we observe that the assessee has inadvertently mentioned the wrong figures of stock in the original return which has lead to corresponding increase in the net profit of the assessee resulting into high and unrealistic net profit, which was rectified by filing revised return on 29/03/2013. After examining the original as well as revised return along with tax audit return and audited financial accounts, we are of the view that there is an inadvertent mistake on the part of the assessee while preparing the original return which was correctly rectified by way of revised return on 29/03/2013. Moreover, the AO, in the remand report dated 24/03/2017 which was called for during the course of appellate proceedings before the CIT(A), submitted that after considering the details and evidences filed during the course of remand proceedings, the revised return of income ₹ 17,81,124/- appears to be correct. We are inclined to set aside the order of the CIT(A) and direct the AO to delete the said addition made on account of closing stock. Thus, this ground of appeal raised by the assessee is allowed. Allowable business expenses - HELD THAT:- We have examined the orders of the lower authorities and also the remand report and observe that the disallowance was made purely on ad hoc basis without assigning any specific reason or giving any finding that the expenses were not incurred in connection with the business of the assessee wholly and exclusively. Disallowance made by the ld.CIT(A) needs to be restricted to 10% of the miscellaneous expenses and 5% of the labour expenses and gift to the parties and 5% of the travelling expenses. Consequently, the assessee gets relief of ₹ 71,625/- under the head ‘miscellaneous expenses’ and under the head ‘labour expenses’, ‘gift to the parties’ and ‘travelling expenses’. Accordingly, this ground of appeal raised by the assessee is partly allowed.
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