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Issues involved: Appeal against deletion of addition on account of low gross profit, challenge against deletion of addition on account of excessive expenses, challenge against deletion of addition on account of excessive claim of depreciation.
Low Gross Profit Issue: The revenue challenged the deletion of addition of Rs. 61,21,033 on account of low gross profit. The AO required the assessee to produce various registers for verification, but the assessee maintained records on computer only. The AO rejected the submission and made the addition based on the fall in gross profit rate. However, the CIT(A) deleted the addition noting no mistake in the books of accounts and accepted the reasons for the fall in profit. The Tribunal upheld the CIT(A)'s decision, stating that maintaining records on a computer is common practice and not a ground for rejection. Excessive Expenses Issue: The revenue challenged the deletion of addition of Rs. 45,19,044 on account of excessive expenses. The AO disallowed the expenses based on a comparative study with the preceding year without pointing out any specific non-genuine expenditure. The CIT(A) deleted the addition as the AO failed to identify inadmissible expenses or reasons for disallowance. The Tribunal dismissed the revenue's appeal, emphasizing the lack of merit in the AO's approach. Excessive Depreciation Claim Issue: The revenue challenged the deletion of addition of Rs. 24,42,330 on account of excessive claim of depreciation. The CIT(A) allowed higher depreciation as claimed by the assessee based on a previous Tribunal order in favor of the assessee. The Tribunal upheld the CIT(A)'s decision, citing precedents supporting the assessee's claim. The revenue's appeal was dismissed based on the established legal position. In conclusion, the Tribunal dismissed the departmental appeal, upholding the CIT(A)'s decisions on all grounds based on the lack of merit in the revenue's challenges.
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