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Issues involved: Appeal against trading addition, disallowance of motor vehicle expenses and depreciation, disallowance of telephone expenses.
Trading Addition Dispute: The appeal challenged a trading addition of Rs. 26,363, with the assessee arguing that sales to the Railway Department were vouched, purchases were also vouched despite some Kacha vouchers, and the decline in G.P. rate was due to increased wages and charges. The AO did not examine Kabadies or point out specific defects in the accounting system. Citing relevant cases, the assessee argued against the addition. The Departmental Representative contended that the AO's findings justified the application of section 145(1) and that the accounts were not verifiable. After considering the contentions and relevant material, the Tribunal referred to previous decisions to conclude that the trading addition was not justified, deleting the addition. Disallowance of Expenses Dispute: Regarding the disallowance of Rs. 15,498 for motor vehicle maintenance and depreciation, and Rs. 5,000 for telephone expenses, the assessee acknowledged some personal use in these expenses but argued that the disallowance was excessive. The Departmental Representative relied on lower authorities' orders. The Tribunal, after considering the contentions and material, found the disallowance for motor vehicle expenses somewhat excessive and reduced it to one-fourth of the claim. However, the disallowance for telephone expenses was upheld as not excessive in the circumstances. General Grounds: Grounds No. 4 and 5, being general in nature, did not require a specific decision. The appeal was allowed in part, with the trading addition being deleted and the disallowance for motor vehicle expenses reduced, while the disallowance for telephone expenses was upheld.
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