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Issues involved:
The judgment involves issues related to the addition of expenses under three heads, namely Khadi, Labour, and Vehicle-fuel expenses, disallowance of house-hold expenses, and the charge of interest under section 234B of the Income-tax Act, 1961. Khadi, Labour, and Vehicle-fuel expenses: The assessee, engaged in civil contracting, contested the addition of expenses totaling &8377; 7,84,256, out of which &8377; 4,50,000 was confirmed by the Commissioner of Income-tax (Appeals). The disallowances were based on lack of proper bills for stone/khadi purchased, self-made vouchers for labour expenses, and vehicle fuel expenses. The Commissioner partially allowed the appeal, considering the nature of the business and the difficulty in procuring bills. The Appellate Tribunal decided to allow the full expenses claimed for khadi and sustained a disallowance of &8377; 1,00,000 for labour and vehicle fuel expenses to prevent revenue leakage. House-hold expenses: The Assessing Officer disallowed &8377; 48,000 for low house-hold withdrawals, considering family size and standard of living. The Commissioner of Income-tax (Appeals) upheld the addition, suggesting that the household expenses were funded by undisclosed income. However, the Appellate Tribunal found no reasonable basis for the disallowance and directed the Assessing Officer to delete the addition of &8377; 48,000, stating that no further addition was necessary. Interest under section 234B: The charge of interest under section 234B of the Act was deemed consequential and did not require further adjudication. In conclusion, the appeal of the assessee was partly allowed by the Appellate Tribunal, with decisions made regarding the disallowance of expenses under different heads and the deletion of the addition for low house-hold expenses.
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