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Issues:
1. Addition of unvouched expenses by the ITO 2. Discrepancies in the purchase of tyres 3. CIT (A) upholding the addition of Rs. 41,663 4. Assessee's appeal against the order of CIT (A) 5. Arguments presented by both parties 6. Analysis of the evidence by ITAT 7. Comparison with a previous case 8. Decision of the ITAT to reduce the addition Analysis: The appeal was filed against the CIT (A) order upholding the ITO's addition of Rs. 41,663 to the assessee's income. The ITO found that the expenses claimed by the assessee were mostly unvouched, leading to an inflated net profit rate of 2.2%. The particular issue arose regarding the repeated purchase of tyres during the accounting period, with discrepancies noted in the tyre purchases made just before the end of the period. The CIT (A) supported the ITO's decision, leading to the appeal. During the appeal, the assessee's counsel argued that all vouchers were submitted, but not considered properly by the authorities. The assessee, a lady not directly involved in the truck's operation, relied on hired help. The counsel contested the CIT (A)'s reliance on income from another vehicle in previous years. However, the Deptl. Representative supported the order. Upon reviewing the evidence, the ITAT agreed with the CIT (A) regarding the abnormality in the tyre purchases, leading to a justified revision of the net profit rate. A comparison was drawn with a previous case where proper records explained expenditure increases, unlike in the current case. The ITAT decided to reduce the addition to Rs. 25,000 considering the truck's past history and subsequent sale. In conclusion, the ITAT partly allowed the appeal, reducing the addition made by the ITO. This detailed analysis highlights the discrepancies in expenses and tyre purchases, the arguments presented by both sides, the ITAT's assessment, and the final decision to reduce the addition based on the truck's history.
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