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TMI Blog1982 (9) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... motor cycles. These vehicles are exclusively used for business purposes only and the business of the firm is with farmers. It is always necessary to visit nearby villages for collection, advertisement and servicing of electric motors and our branches of satana and Kalwan. In proper Malegaon, there is absolutely no necessity to use the above car and motor cycle as the resident premises and shop premises are also at a very close distance, hence the disallowances of 1/3 expenses is not warranted. (ii) Regarding disallowance of Rs. 1,000 out of Rs. 2,693 we, request your honour that this disallowance is on ad hoc basis and without any reasoning. All the expenditure is for the business purposes, i.e. (i) to go Bombay, Nasik, Dhule, Poona for purchasing (ii) for Bank work (iii) for income Tax /Sales Tax appeals (iv) for tender forms, tender rates etc. There is no justification for disallowing Rs. 1,000 out of the same. (iii) As far as telephone misc expenses are concerned, there is no personal use of the same. After looking the turnover of business, the expenses of telephone bills Rs. 2,411 and misc expenses Rs. 1,219 cannot be said to be excessive. The misc expenses includes refr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e customers. Sometimes interest is received. Sometimes is not received. In these circumstances, the assessee does not take credit for the interest in its book of account. Interest as and when received from the customers is credited to the books of account on cash basis. In respect of this source of income, the assessee is maintaining books of account on cash basis. This fact was brought to the notice of the ITO at the assessment stage. In our opinion, merely because the assessee maintains books of account on mercantile basis in respect of rest of the accounts, this addition should not have been made, particularly, in view of the fact that the very receipt of the amount was of doubtful nature. So long as it is not the case of the ITO that some of the interest received from the customers have not been credited to the books of account, the ITO could not have made such an addition. 6. During the course of the appeal proceedings before the AAC, the AAC found that the ITO after considering the rough trade account and fair books of account added the difference of gross profit between rough and fair trading account which has not been shown by the assessee. In short, this addition had bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said customer returned such goods due to not granting the loan from society. (2) The electric motor pump of Rs. 2,150 by bill No. 2385 dt. 23rd Oct., 1975 had been purchased by Shri Sakharam Deval Patil of Vaidgaon after Diwali, i.e., S.Y. 2032 by bill No. 2633 dt. 1st May, 1976 due o difference in the rate. The amount debited to said customer's account had already been cancelled in the ledger page No. 275. (3) In rough loose papers, in totalling, the sales has taken more by Rs. 100 in Ashwin month by mistake. Such totalling was corrected while preparing fair trading a/c, i.e., in rough loose paper the total sales is Rs. 8,075 while in fair trading account it is Rs. 7,975. The details of cancelled bills as per account is as follows; Bill No Date Name Elec. motor pumps Starter Main swit. Meter Box Elec. spares Total 2364 2-9-1975 Uttam Kashiram, Vadel 2700 270 65 45 195 3275 2385 23-10-1976 Sakharam Deval, Malegaon 2150 275 65 45 165 2700 4853 545 130 90 360 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r following account. To opening stock + Purchases (rough estimate) 2,67,122 By sales 2,75,612 (estimated) . . Less : 4,950 cancelled bills 2,70,662 To purchases (as per para 1) 1,075 . To G.P. 61,995 by closing stock 59,530 3,30,192 3,30,192 5. Regarding differences of two pieces in electric motor, we have to state that the opening balance is 39 pieces and purchases are of 119 pieces. Against this there is sales of 111 pieces and closing stock is 47 pieces. In the rough estimate, there was sale of 113 pieces while assessee the ITO's order, it is 110 which is wrong and also added Rs. 1,430 as suppressed sale totally unwarranted. (a) The difference of two pieces came out due to cancellation of two bills as paragraph No. 2 i.e., rough estimate there is sale of 113 pieces while in fair trading account it is 111. (b) In rough estimate the closing stock is 45 pieces while in regular (fair) account it is 47 pieces. The increasement of two pieces in closing stock is due to cancellation of two bills. In the assessment order of ITO, Rs. 1,430 is added ..... X X X X Extracts X X X X X X X X Extracts X X X X
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