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TMI Blog2019 (12) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of closing stock without appreciating the Revised Return of Income filed by the appellant and same is approved by the Ld. Assessing officer in the Remand report stating "appears to be correct and the same may now be accepted". 2. On the facts and circumstances of the case, the Ld. Commissioner of Income Tax (appeal) erred in making adhoc disallowance of Rs. 9,29,167/- without appreciating that expenses are incurred wholly and exclusively for business purpose and also failed to pin point any specific issues in the Expenses incurred." 3. The issue raised in ground No.1 is against the order of the ld.CIT(A) in confirming the addition of Rs. 3,11,53,876/- made by the AO on account of closing stock. 4. Facts of this issued in brief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considering total income of Rs. 17,81,124/- as per second return of income filed by the appellant and computing income as per original return of income filed by the appellant is concerned, it is seen that the AO did so because total income as per original return of income was Rs. 3,29,61,000/- and the appellant did not provide any explanation during the course of assessment proceedings regarding the drastic reduction in total income as per the second return of income vis-a-vis the original return of income filed by the appellant. The second return of income filed by the appellant was not a valid revised return of income, therefore, the AO could not be faulted for starting the computation by taking total income as per original return of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13500/ 12100 8,18,64,000/ 733,74440 Trinity Godown, Gandhidham Barley 5047.50/ 5047.50 12000/ 11000 6,05,70,000/ 5,55,22,500 Himachal, Vashi Maize 2024.43/ 2024.43 11747/ 10650 2,37,82,000/ 2,15,60,221 Vaibhav Lakshmi, Vas hi Maize 2428.93/ 2428.93 13500/ 12100 3,27,90,600/ 2,93,90,093 Almighty, J Maize 1560/ 1560 13500/ 12100 2,10,60,000/ 1,88,76,000 Total 26935.32/ 26935.32 33,77,92,000/ 30,66,38,164 The AO has further stated as under:- "In support of the above assessee has furnished closing stock certificate (signed by the auditor) as on 31/ 03/2011 which certified that the closing stock was physically taken by the auditor and also valuation is made by the auditor. Assessee has also furni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the round figures adopted in valuation of closing stock as per cost price, the appellant was asked to produce supporting bills in respect of the values adopted as cost price of the purchases. Despite ample opportunity being given, the appellant could produce only one bill each in respect of all three rates adopted by the auditor. The appellant has also shown its inability to produce any more bills. Bill in respect of Barley produced by the appellant is dated 06/11/2010 and the same is for 263.87 quintals. Similarly, the bill for Maize is dated 29/11/2010 and the same is for 205.17 quintals. The other bill for-Maize at the rate of 1065 per quintal is dated 02/01/2011 and quantity is 155.10 quintals. (10 quintals = 1 MT). Thus, it can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e remand report dated 24/03/2017 which was called for during the course of appellate proceedings before the ld.CIT(A), submitted that after considering the details and evidences filed during the course of remand proceedings, the revised return of income Rs. 17,81,124/- appears to be correct. In view of these facts, we are inclined to set aside the order of the ld.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. 7. The issue raised in ground No.2 is against the order of the ld.CIT(A) in confirming the ad hoc disallowance to the extent of Rs. 9,29,167/- without appreciating that these expenses are incurred wholly and exclusive for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii)10% of labour expenses of Rs. 29,21,204/- (iii) 10% of gift to parties of Rs. 4,90,000 1,43,251 2,92,120 49,000 4,84,371 2 Travelling expenses 10% of the travelling expenses of Rs. 44,47,962 4,44,796 Total 9,29,167 10. After hearing the rival contentions of both the parties and perused the material on record, the AO made the ad hoc disallowance of Rs. 2,40,39,080/- which was restricted by the ld.CIT(A) to Rs. 9,29,167/- on the basis of remand report called for during the appellate proceedings. The details of the disallowance upheld by the ld.CIT(A) has been given hereinabove in the table. We have examined the orders of the lower authorities and also the remand report and observe that the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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