2011 (10) TMI 578 - AT - Income Tax

Summary

Issues Involved:
The issues involved in this case are the deletion of trading addition u/s 145 of the Income Tax Act, reduction of car maintenance expenses, deprecation on car, and telephone expenses from 20% to 10%.

Deletion of Trading Addition u/s 145:
The Appellate Tribunal considered the case where a survey u/s 133A revealed incomplete books of accounts and the absence of a stock register. The Assessing Officer (AO) rejected the books u/s 145 and recomputed the trading results by applying a 20% gross profit rate. The Tribunal found that the AO did not provide a basis for adopting the 20% profit rate. Consequently, the Tribunal upheld the order of the Ld. CIT(A) in deleting the addition made by the AO.

Reduction of Car Maintenance Expenses, Depreciation on Car, and Telephone Expenses:
The AO had disallowed 20% of car maintenance expenses, depreciation on car, and telephone expenses for personal use. The Ld. CIT(A) reduced this disallowance to 10%. The Tribunal found that the reduction made by the Ld. CIT(A) was reasonable and appropriate based on the facts and circumstances of the case. Therefore, the Tribunal upheld the order of the Ld. CIT(A) in this regard and dismissed the appeal of the revenue.