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2021 (7) TMI 138 - AT - Income TaxAddition with respect to insurance claimed received against the vehicle repairing expenses - HELD THAT:- The amount received by the assessee represents the receipt from the insurance company against the damage of the vehicles which was not offered to tax. The assessee on one hand has claimed full vehicle running expenses and on the other hand insurance claim received by him against such expenses has not been offered to tax. As such, the assessee was liable to offer such insurance claim to income tax. Accordingly, we do not find any infirmity in the order of the authorities below. Hence, the ground of appeal of the assessee is dismissed. Unreconciled credit balance - HELD THAT:- On perusal of the copies of the ledgers we note that such difference is arising in the account of the sundry creditor on account of opening balance which were carried forward from the preceding year. Therefore such difference in the opening balance cannot be added to the total income of the assessee in the year under consideration. The impugned difference, if liable to be added to the total income of the assessee, then the same can be done in the year to which it relates and not in the year under consideration. At the time of bearing, the learned DR has not brought anything on record contrary to the argument advanced by the learned AR for the assessee. Accordingly we do not find any reason to uphold the finding of the authorities below. Disallowance being 20% of various vehicle expenses - HELD THAT:- As noticed that the AO has disallowed 20% of petrol expenses, depreciation: on motor car, interest on car loan, vehicle insurance and vehicle repairing since no log book was maintained to establish exclusive use of vehicle for business purposes. During the course of appellate proceedings, the appellant has not furnished any evidence to prove that he also owned other vehicle for personal use by him and his family members - personal use of the vehicle claimed in the business, cannot be ruled out and accordingly disallowance made by the Assessing Officer which is very reasonable, is sustained. Disallowance at the rate of 20% is on the higher side and prayed to make some token disallowance in the interest of justice - HELD THAT:- We are of the view that there was no basis of making the disallowance at the rate of 20% of the expenses as discussed above. In fact there is no standard jacket formula for making the disallowance on a ad-hoc basis in the given facts and circumstances. It is because the possibility of personal element in the expenses discussed above cannot be ruled out. However in the interest of justice and fair play, we direct the AO to restrict the disallowance at the rate of 12% of the expenses after considering the preceding discussion. Hence the ground of appeal of the assessee is partly allowed.
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