2002 (8) TMI 278 - AT - Income Tax

Summary

Issues Involved:
- Appeal against CIT(A) order for asst. yr. 1992-93.

Trading Addition Issue:
The AO invoked provisions of s. 145(2) due to lack of day-to-day stock register, applying enhanced gross profit rate of 20%. Assessee argued purchases and sales were vouched, with no specific defects in book maintenance. Tribunal noted previous year's gross profit comparison, deleting the trading addition as no specific mistakes were pointed out by the AO.

Unexplained Cash Credit Issue:
AO made an addition of Rs. 72,000 under s. 68 for unexplained cash credit. Assessee established genuineness of cash credits, but AO found source of deposits unproven. Tribunal directed AO to examine agricultural holdings proof and net savings details, restoring the issue for fresh consideration.

Telescoping and Disallowances Issue:
Telescoping the unexplained cash credit with trading addition was deemed immaterial as trading addition was deleted. Disallowances of travelling, vehicle maintenance, and telephone expenses were reviewed. Travelling expenses disallowance was deleted as tours were business-related, supported by required documentation. However, disallowances on vehicle maintenance and telephone expenses were upheld as reasonable.

Conclusion:
The appeal was partly allowed, with trading addition and certain disallowances being deleted or upheld based on the Tribunal's findings.