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2016 (3) TMI 497 - ITAT MUMBAI

2016 (3) TMI 497 - ITAT MUMBAI - TMI - Additions pertaining to excess stock found during the course of search - Held that:- We notice that the assessee has been claiming that that the excess stock found during the course of search does not belong to it and the said contentions have been rejected by the tax authorities for want of documentary evidences. Now, the assessee has filed certain additional evidences, in the form of affidavits claimed to have been obtained from the original owners of the .....

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and Shri Faisal Hamid and restore the same to the file of the AO with a direction to examine these three additions afresh and take appropriate decision in accordance with law. - Decided in favour of assessee by way of remand

Disallowance of electricity expenses, Municipal Expenses, rent expenses and telephone expenses - Held that:- With regard to the assessee herein, it was stated that it is occupying maximum space, meaning thereby most of the expenses stated above have been incurred .....

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he higher side. Since all the four concerns share common building, we are of the view that some disallowance is called for. Since it is claimed that the assessee is occupying more space and its business activities are more, we are of the view that the disallowance should be restricted to 25% of the expenditure claim. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to restrict the disallowance to 25% of the expenses claimed under the four heads, referred supra. - .....

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7; 1,56,734/-; c) Disallowance of Municipal Expenses ₹ 94,285/-; d) Disallowance of rent expenses ₹ 90,000/; and e) Disallowance of telephone expenses ₹ 1,61,044/-. 2. The assessee is a dealer in Electronics goods. A survey action u/s 133A of the Act was conducted in the business premises of the assessee on 2.1.2005. During the course of survey action, excess stock valued at ₹ 14,83,851/- was found. During the course of assessment proceedings, the AO assessed the same as .....

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a dealer in musical systems and hence the suppliers used to keep their own stock for display purposes at the business premises of the assessee. Accordingly he submitted that the stocks, which were found to be in excess, actually do not belong to the assessee. The Ld A.R submitted that the assessee has moved a petition for admission of certain additional evidences, which consists of affidavits given by the owners of the following items of stock, which have been assessed as excess stock in the ha .....

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found during the course of search does not belong to it and they have been kept in the business premises of the assessee by the concerned owners for display. Accordingly, he prayed that these additional evidences may kindly be admitted and examined. 4. We heard the ld. DR and perused the record. We notice that the assessee has been claiming that that the excess stock found during the course of search does not belong to it and the said contentions have been rejected by the tax authorities for wan .....

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ion, we set aside the order of the ld. CIT(A) in respect of the additions covered by the affidavits given by M/s Innovative Information Technology Pvt. Ltd, Shri Rajiv Jain and Shri Faisal Hamid and restore the same to the file of the AO with a direction to examine these three additions afresh and take appropriate decision in accordance with law. 5. In respect of addition pertaining to Meganepan MG 12 amounting to ₹ 62,101/-, the assessee has furnished an invoice dated 14.12.2004 4 5512/M/ .....

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did not take place. Hence we do not find any merit in the contentions of the assessee that Megnepan MG 12 does not belong to it. Accordingly, we reject the claim of the assessee in respect of this instrument and accordingly confirm the addition relating thereto. 6. With regard to the instruments named Adam Speakers -ANF 10 pair ₹ 25,000/- and Adam Speakers- SIA 1 pair - ₹ 45,000/-, the assessee furnished a letter dated NIL written by ADAM, Germany, wherein it is stated that the abov .....

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regard to these two items are also not acceptable. Accordingly we reject the same and accordingly confirm the additions relating thereto. 7. The assessee did not furnish any explanation with regard to the remaining items of instruments. Accordingly, except four items (covered by three affidavits), which have been restored back to the file of the AO, the remaining additions confirmed by ld. CIT(A) is hereby upheld. 5 5512/M/2010 8. The next issue relates to disallowance made out of various expens .....

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ld belong to the assessee. Accordingly, the AO disallowed 75% of the expenses claimed by the assessee towards Electricity, Municipal taxes, rent and telephone. The ld. CIT(A) also confirmed the same. 9. The ld. AR submitted that the concern named M/s Lakozy Electronics P Ltd has stopped business activity in the year 2003-04. He further submitted that the assessee has been occupying maximum area of the building. The ld. AR further submitted that another concern named M/s Lakozy Impex and Services .....

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