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TMI Blog2017 (6) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... nable. - Decided in favour of assessee Disallowance under the head interest account - Held that:- It is none of the business of the revenue to decide as to how the assessee shall conduct his business. Whether the assessee should take loan or utilize internal resources is the sole prerogative of the assessee. It is not the case that the assessee has not paid the interest. As held in CIT vs Walchand & Co (P) Ltd (1967 (3) TMI 2 - SUPREME Court) hold that in applying the test of commercial expediency for determining whether the expense was wholly and exclusively laid out for purpose, reasonablenesss of the expense has to be judged from the point of view of businessman and not revenue. Hence, this disallowance is directed to be deleted.- Dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER This appeal by assessee is directed against the order of CIT(A) dated 07-05- 2013 and pertains to AY 2006-07. Grounds of appeal read as under:- 1. For that the grounds of appeal hereto are without prejudice to each other. 2. For that in the facts and circumstances of the case the learned CIT(A) is not justified in sustaining an addition of ₹ 3,86,188/- on account of alleged less Gross Profit. The learned CIT(A) has applied a Gross Profit 6.81% on ₹ 94.69,305/- in Kirana Items and 4% on ₹ 1,91,83,681/- in Refined Oil. The addition as sustained at ₹ 3,86,188/- on account of alleged less Gross Profit is arbitrary, unjustified and misconceived. The addition as sustained is fit to be deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10% out of telephone expenses of ₹ 35,875/-. The disallowance as sustained is arbitrary and unjust. The same is fit to be deleted. 7. For that in the facts and circumstances of the case, the learned CIT(A) is not justified in sustaining the disallowances of ₹ 2,188/- being 10% out of car expenses of ₹ 21,889/-. The disallowance as sustained is arbitrary and unjust. The same is fit to be deleted. 8. For that in the facts and circumstances of the case, the learned CIT(A) is not justified in sustaining the disallowances of ₹ 3,153/- being 10% out of mobile expenses of ₹ 31,5338/-. The disallowance as sustained is arbitrary and unjust. The same is fit to be deleted. 9. For that in the facts and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for further examination, but it cannot be a sole reason for making adhoc addition. In these circumstances, in my considered opinion, this addition made is based upon surmises without rejection of books of account and hence, not sustainable. Accordingly, I set aside the orders of Ld.CIT(A) and direct that this addition be deleted. 7. Apropos ground 3 with regard to disallowance under the head interest account. 8. The AO noted that assessee had paid ₹ 3 lakhs interest on loans taken. He further noted that assessee was carrying substantial cash in hand in the books of account. The reasons for carrying substantial cash was attributed by the assessee to proposal to purchase capital asset. On these factual conspectus, the lower author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been said to have been arrived at partly on the basis by applying the gross profit rate, which in the earlier part of this order, I have deleted. Moreover, it is the contention of the Ld.Counsel of the assessee that the stock found on survey was taken at the MRP which has also resulted in increase in the value of the stock. Upon careful consideration, I remit this issue to the file of the AO. The AO shall consider this issue afresh keeping into account the observations as above. Needless to add, the assessee should be granted adequate opportunity of being heard. 13. Apropos ground 5, addition on account of loss on fire. 14. The AO has noted that assessee has debited / claimed loss on fire amounting to ₹ 67,518. It was noted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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