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TMI Blog2015 (11) TMI 1680X X X X Extracts X X X X X X X X Extracts X X X X ..... ium extrusions, sheet, coil, etc. under the name and style of his proprietor concern M/s. R. Kumar & Co. The return of income for the year under consideration was filed by him on 31.10.2006 declaring total income of Rs. 1,12,700/-. During the course of assessment proceedings, it was noticed by the Assessing Officer that due to abnormal increase of price in aluminium, the assessee had earned super-natural profit, but the same was reduced by under valuation of closing stock. In this regard, he noted that the average cost of aluminium purchased by the assessee during the year under consideration was Rs. 152.76 per kg., whereas the closing stock of aluminium was valued by the assessee at the rate of Rs. 99.65 per kg. In order to verify the corr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while the average cost of aluminium purchased by the assessee was Rs. 152.76 per kg. Accordingly, following the FIFO method, the value of closing stock of aluminium lying with the assessee was worked out by the Assessing Officer at Rs. 50,02,894/- as against the value of Rs. 39,61,500/- shown by the assessee and the difference of Rs. 10,41,394/- was added by him to the total income of the assessee. 3. In the Profit & Loss Account, a sum of Rs. 45,529/- was debited by the assessee towards building reconstruction cost under the head "miscellaneous expenses". In this regard, it was explained by the assessee that as per the order of the Hon'ble Calcutta High Court and agreement between building owners and tenants, the reconstruction cost of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessing Officer to the extent of 20% for the personal use of the assessee since the assessee could not produce the relevant documentary evidence in the form of log book, etc. to show that the same were wholly and exclusively incurred for the purpose of business. Accordingly, the total income of the assessee was determined by the Assessing Officer at Rs. 12,66,330/- in the assessment completed under section 143(3) vide an order dated 18.12.2008. 4. Against the order passed by the Assessing Officer under section 143(3), an appeal was preferred by the assessee before the ld. CIT(Appeals) and after considering the submissions made by the assessee as well as the material available on record, the ld. CIT(Appeals) confirmed all the addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of elevator by the assessee of Rs. 17,632/- and addition of same in income of the assessee, thereby, confirming addition made by the ld. AO. (7) For that Hon'ble CIT(A) not justified in making 10% disallowances of car expenses and depreciation on ad hoc basis. 5. I have heard the arguments of both the sides and also perused the relevant material available on record. As regards the issue involved in Grounds No. 1 & 2 relating to the assessee's claim for applying the provisions of section 44AF, it is observed from the Trading and Profit & Loss A/c. of the assessee that although the amount of Rs. 39.82 lakhs is credited on account of sales, the same is a net amount after deducting expenditure incurred by the assesese on turnover tax an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by him, it is difficult to apply the rate of one product to value the closing stock of the assessee. It is also worthwhile to note here that the rate of Rs. 99.65 per Kg. was indicated by the assessee himself as the scrap value of products and it is, therefore, difficult to accept the claim of the assessee that the market value of the aluminium products dealt with by him was only Rs. 111/- per kg. On the other hand, the method followed by the Assessing Officer for valuation of closing stock, in my opinion, is more scientific as he has taken into consideration the average cost of opening stock as well as the average cost of products purchased by the assessee during the year under consideration and by following FIFO method, he has determine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessee, the expenditure in question was undoubtedly incurred by the assessee for the purpose of his business in order to retain his right over the building for use of the same in future for the purpose of business. Accordingly, I delete the disallowance made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on this issue and allow Ground No. 5 of the assessee's appeal. 9. As regards the issue raised in Ground No. 6 relating to the disallowance of Rs. 17,632/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of expenses incurred by the assessee for maintenance of elevators, it is observed that the said expenses were incurred by the assessee in respect of his residential house and in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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