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TMI Blog2015 (11) TMI 1680X X X X Extracts X X X X X X X X Extracts X X X X ..... other hand, the method followed by the Assessing Officer for valuation of closing stock, in my opinion, is more scientific as he has taken into consideration the average cost of opening stock as well as the average cost of products purchased by the assessee during the year under consideration and by following FIFO method, he has determined the value of closing stock of the assessee, which in the facts and circumstances of the case cannot be found with any fault. - Decided against assessee. Deduction claimed by the assessee on account of expenses incurred on reconstruction of house/godown - Held that:- As submitted by the the assessee, a similar deduction claimed by the assessee, however, is allowed by the Assessing Officer himself in the earlier years as well as in the subsequent years even in the assessment completed under section 143(3) and since the ld. D.R. has not been able to dispute this position, we decide this issue in favour of the assessee. Addition on account of rent - disallowance made by the authorities as the building being under construction, the same could not have been used by the assessee for the purpose of business - Held that:- As rightly contended by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of price in aluminium, the assessee had earned super-natural profit, but the same was reduced by under valuation of closing stock. In this regard, he noted that the average cost of aluminium purchased by the assessee during the year under consideration was ₹ 152.76 per kg., whereas the closing stock of aluminium was valued by the assessee at the rate of ₹ 99.65 per kg. In order to verify the correctness of the valuation of closing stock, the assessee was called upon by the Assessing Officer to furnish the item wise quantitative details. In reply, it was submitted by the assessee that there being wide variety of aluminium products dealt with by him, produce-wise details were not maintained and the entire stock of aluminium products was maintained under one category in kilogram. It was also submitted by the assessee that his turnover being less than ₹ 40,00,000/- and the net profit offered by him being more than 5%, i.e. 5.15% of the turnover, the same was liable to be accepted as per the provisions of section 44AF of the Act. This stand of the assessee was not found acceptable by the Assessing Officer, as according to him, the gross turnover of the assessee was & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid by the assessee for the said godown on the ground that due to the reconstruction activity, the godown building was not available to be used for the purpose of assessee's business. Similarly expenditure of ₹ 17,632/- claimed by the assessee towards maintenance of elevator of his residence at 23B/8A, D.H. Road, New Alipore, was disallowed by the Assessing Officer on the ground that the same was not incurred for the purpose of assessee's business as found by him on the basis of report submitted by his Inspector. The expenses claimed by the assessee on account of maintenance of motor cars were also disallowed by the Assessing Officer to the extent of 20% for the personal use of the assessee since the assessee could not produce the relevant documentary evidence in the form of log book, etc. to show that the same were wholly and exclusively incurred for the purpose of business. Accordingly, the total income of the assessee was determined by the Assessing Officer at ₹ 12,66,330/- in the assessment completed under section 143(3) vide an order dated 18.12.2008. 4. Against the order passed by the Assessing Officer under section 143(3), an appeal was preferred by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure incurred by the assesese on turnover tax and VAT. Since what has to be taken into consideration for applicability of section 44AF is gross turnover and the same is more than ₹ 40 lakhs, as is evident from the Profit & Loss A/c., I am of the view that the provisions of section 44AF are not applicable in the case of the assessee, as rightly held by the authorities below. I, therefore, find no merit in Grounds No. 1 & 2 of the assessee's appeal and dismiss the same. 6. As regards the issue involved in Ground No. 3 relating to the addition made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of under-valuation of stock, ld. Counsel for the assessee has submitted that the assessee is consistently following the method of valuing the stock at cost or market price, whichever is lower and since the market value of the aluminium lying in stock was less, the same was adopted by the assessee. In this regard, he has invited our attention to the MEX list of aluminium price published showing the market value of aluminium at ₹ 111.1 per Kg, and submitted that the same may be adopted to value the closing stock of aluminium. I find it difficult to accept th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was made by the authorities below on the ground that the building being under construction, the same could not have been used by the assessee for the purpose of business. However, as rightly contended by the ld. Counsel for the assessee, the expenditure in question was undoubtedly incurred by the assessee for the purpose of his business in order to retain his right over the building for use of the same in future for the purpose of business. Accordingly, I delete the disallowance made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on this issue and allow Ground No. 5 of the assessee's appeal. 9. As regards the issue raised in Ground No. 6 relating to the disallowance of ₹ 17,632/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of expenses incurred by the assessee for maintenance of elevators, it is observed that the said expenses were incurred by the assessee in respect of his residential house and in the absence of any evidence produced by the assessee to show that his residential house was used for the purpose of business, I find no justifiable reason to interfere with the impugned order of the ld. CIT(Appeals) confirming the ..... 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