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TMI Blog2013 (2) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... - No value of stock was left at the end of the year. – Held that:- Having regard to the entirety of the facts and circumstances of the case, disallowance of Rs.50,000/- is fair and reasonable - Appeal of the assessee is partly allowed. Rent paid for guest-house – Firm is maintaining a guest house at Mohali for the stay of officer of Maruti Udyog Ltd. and has paid rent – Held that:- Having regard to the fact situation of the case and the evidences filed by the assessee, not found any justification in the addition made - In favour of ssessee. Addition on the ground of personal element – Assessee had shown Staff Tea Expenses at Rs.3,59,739/-, House Keeping Expenses at Rs.1,52,117/- and General Expenses at Rs.13,44,597/- AO made disallowance on account of personal use by the assessee – Held that;- The addition made by the AO, on the ground of personal element in use of such services by the partners and in view of un-vouched expenses, cannot be brushed aside. However, keeping in view the factum of reasonableness of such expenses, the addition made by the isconfirmed to the extent of Rs.80,000 - Assessee gets partial relief. - ITA No. 525/CHD/2011 - - - Dated:- 10-1-201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasonable disallowance." 3. Ground No.1 is general in nature and needs no separate adjudication. 4. In Ground No.2, the assessee contended that CIT(A) has wrongly sustained addition of Rs.7,37,022/- on account of under valuation of stock of motor cycles and spares. In the course of present appellate proceedings, it was conceded by the ld. 'AR', after referring to page 19 to 30 of the Paper Book and para 11 of the order of the ITAT, Chandigarh in assessee's own case vide I TA No. 1233/Chd/2009 A.Y. 2006-07, dated 18.03.2012, that the issue is covered against the Revenue. The relevant part of the order of the ITAT is reproduced hereunder : "11. Ground Nos.4 and 5 raised by the Revenue are against the addition made on account of valuation of stock. The assessee has also raised Ground No.2 in its appeal against the addition of 20% of Rs.8,59,650/- being the alleged under-valuation of closing stock of spare parts confirmed by the Commissioner of Income-tax (A). The assessee, by Ground No.2 in its Cross Objection has also raised the issue as in Ground No.2 of its appeal. The Ground No.3 raised by the assessee in its Cross Objection is in support of the order of the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer. However, in the remand report, the Assessing Officer stated that though sufficient opportunities were given to the assessee, the assessee failed to discharge his onus during assessment proceedings and hence rejected the explanation. In rejoinder to the remand report of the Assessing Officer, the assessee submitted the model wise details of closing stock of motor cycles are available on record of the Assessing Officer. The details of closing stock of spare parts giving details of nature of the part, quantity, rate, overhead expenses and final valuation were filed. The CIT(A) held that "The method adopted by the Assessing Officer in taking average cost of motor cycle is not a recognized method of valuation of stock in the case of the facts when complete details are available with the assessee". The CIT(A) further held that from the list of stock of motor cycle it is found that the cost thereof ranges form Rs. 22000+ to Rs. 66,000+ and under such circumstances, it will not be correct to restore to weighted cost. Since, no defect in the working of the closing stock has been pointed out by the Assessing Officer in his counter comments, in respect of motor cycle, henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded to the Assessing Officer for examination. The Learned DR for the Revenue placed reliance on the order of the Assessing Officer in respect of addition made on account of valuation of motor cycle and the findings of the CIT(A) on page 8 in respect of valuation of spare parts. 15. We have heard the rival contentions and perused the records. The issue of valuation of closing stock is on account of stock of motor cycles and stock of spare parts. The assessee has maintained item wise, quantitative details of the various models of motor cycles available in the stock at the end of the year. The valuation of the stock of motor cycles has been done by the assessee by adopting the cost and the allied charges as part of the cost and worked out the total value of the particular model of motor cycle. From the perusal of details furnished at page 30 of the paper book, we find that the cost of the motor cycles is variable viz-a-viz the model of the motor cycle. The valuation worked out by the assessee is further backed by the bills maintained by the assessee. The Assessing Officer, however, worked out the average cost after considering purchase of a particular model of motor cycle and ado ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 10. In Ground No.5, the assessee contended that ld. CIT(A) erred in confirming addition of Rs.1,00,000/- out of various expenses claimed under various heads in the Profit Loss Account. The AO found that assessee had claimed expenses under various heads, for which personal element of use by 9 the partners and un-vouched expenses cannot be ruled out. The assessee had shown Staff Tea Expenses at Rs.3,59,739/-, House Keeping Expenses at Rs.1,52,117/- and General Expenses at Rs.13,44,597/-. Consequently, the AO made disallowance on account of personal use by the assessee. The ld. CIT(A), having regard to the facts and circumstances of the case and the remand report, submitted by the AO, upheld the impugned additions. The addition made by the AO, on the ground of personal element in use of such services by the partners and in view of un-vouched expenses, cannot be brushed aside. However, keeping in view the factum of reasonableness of such expenses, the addition made by the AO and confirmed by the CIT(A) is upheld, to the extent of Rs.80,000/-. The assessee gets partial relief. Accordingly, this ground of appeal of the assessee is partly allowed. 11. In the result, appeal of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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