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Issues:
1. Estimation of sales and gross profit by the assessing officer. 2. Addition of alleged unreconciled investment made by a partner. 3. Disallowance of car expenses and car depreciation for personal use. Analysis: Issue 1: The assessing officer estimated the sales at Rs. 8 lacs and applied a gross profit rate of 15% resulting in an addition to the trading account of Rs. 46,265. The assessing officer invoked provisions of s.145(2) due to unverifiable entries in the books of accounts. The assessee contended that the export sales were channeled through agencies and fully vouched, making the estimation unwarranted. The appellate tribunal found no evidence of unvouched sales and held the estimation of sales at Rs. 8 lacs unjustified, especially for export sales. Issue 2: The assessing officer added Rs. 5,507 as alleged unreconciled investment made by a partner in his individual property to the firm's income. The appellate tribunal observed that this amount should have been included in the partner's hands, not the firm's, as it was invested in his individual property. Citing provisions of s.69 of the IT Act, the tribunal deleted the inclusion of Rs. 5,507 from the firm's income. Issue 3: The disallowance of car expenses and car depreciation for personal use to the tune of 1/4th was contested by the assessee, arguing it should be limited to 1/5th. After considering both parties' arguments, the tribunal found that restricting the disallowance to 1/5th would be reasonable. Consequently, the tribunal allowed the appeal in part, modifying the disallowance percentage. In conclusion, the appellate tribunal ruled in favor of the assessee on the estimation of sales and the inclusion of alleged investment in the firm's income, while partially allowing the appeal by adjusting the disallowance percentage for car expenses and depreciation.
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