9911796707
TMI Blog2013 (6) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons and also ignoring the comparable case quoted in the assessment order 2. allowing the accidental related expenses despite holding that these are of capital nature 3. deleting the disallowance of expenditure of Rs. 2,07,340/- and treating it as of Revenue nature 2.2 In the C.O. the assessee has raised following grounds:- 1. The impugned additions and disallowances made in the order u/s 143(3) dated 27.12.2010 are bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence, the same kindly be deleted. 2.1 Rs.50,000/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the application of Section 145(3 ). The provision so invoked by the AO and partly confirmed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kindly be deleted in full.'' 2.3 The grounds raised in Revenue's appeal as well as in the C.O. of the assessee are common. Therefore, the same are being disposed off by this Composite order. 3.1 The Ground No. 1 of the Revenue and Ground No. 1 and 2 of the C.O. of the assessee are regarding addition on account of gross profit rate by applying the provision of Section 145(3) of the Act. 3.2 The brief facts of the case are that the assessee was engaged in the business of Stone Crushing and trading. During the year, the assessee has shown gross profit of Rs. 31,64,526/- against sale of Rs. 1,26,69,849/-. The AO noticed that in the trading account, the assessee has shown purchases of stone of Rs. 61,32,718/- which account for approximate 50% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stock. Further the assessee failed to furnish proper bills for purchases of stones and therefore, in the absence of verifiable documents for purchases of stones as well as proper maintenance of books of account and the discrepancies in the stock, we are of the view that AO has rightly invoked the provision of Section 145(3) of the Act. Accordingly, we dismiss the Ground No. 1 of the C.O. of the assessee. 3.6 As regards the addition on account of gross profit rate, we noted that the AO has applied the gross profit rate at 30.50% but there is nothing on record to support the gross profit rate applied by the AO that the same is prevailing in the industry. Further when the assessee has shown the gross profit rate at 25.85% and 25.16% for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the expenditure incurred on the car is in the nature of repair of the existing vehicle. Therefore, the addition was directed to be deleted, though in the order, the ld. CIT(A) has mentioned that this expenditure has to be treated as capital. 4.3 The ld. DR has submitted that the ld. CIT(A)'s conclusion is contrary to the reasoning and observations whereby the expenditure in question was treated as capital but still directed to be deleted. 4.4 On the other hand, the ld. AR of the assessee submitted that reasoning of the ld. CIT(A) shows the said expenditure was treated as Revenue and there may be a type mistake whereby instead of has not to be treated, it is mentioned 'has to be treated'. 4.5 We have heard both the parties and peruse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave heard the ld. DR as well as the ld. DR and carefully gone through the materials on record. There is no dispute that the expenditure was incurred for replacement of old and damaged body of trucks which were already in existence and used by the assessee in his business. Once an existing asset which has been used in the business of the assessee got repaired and in the process of repairs if some parts are replaced then it cannot be considered as capital expenditure. Though the said expenditure does not fall under the terms current repairs because it is not incurred due to wear and tear during current year. The replacement of body of the trucks is accumulated wear and tear expenditure and therefore, it does not fall under expression current ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ials on record. The assessee is an individual and it has not brought on record that he is maintaining separate private car for his personal use. We therefore, concur with the views of the authorities below that perusal use of the vehicle cannot be ruled out. As regards disallowances on account of diwali and office expenses for want of proper vouchers and personal element, though in principle when the assessee has failed to produce the relevant evidences in support of the claim of the expenditure, the disallowances made by the authorities below cannot be faulted with however, in our view disallowance of 10% of the same would be reasonable and meet the ends of justice. 7.1 The Ground No. 4 of the assessee is regarding charging of interest u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
