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TMI Blog2018 (11) TMI 1251X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the valuation of closing stock. 2. On the facts and in the circumstances of the case, the CIT (A) has erred in law in deleting the addition of Rs. 5,00,000/- made by the Assessing Officer on account of low G.P. without appreciating the full facts of the case, as the explanations furnished by the assessee were not convincing and after considering the facts & circumstances of the case, the G.P. declared by the assessee was not accepted. 3. On the facts and in the circumstances of the case, the CIT (A) has erred in law in deleting the addition of Rs. 50,000/- made by the Assessing Officer on account of unverifiable expenses without appreciating the full facts of the case. 4. On the facts and in the circumstances of the case, the CIT (A) has erred in law in deleting the addition of Rs. 1,08.02,164/- made by the Assessing Officer under section 68 of I.T.Act, 1961 as unexplained^uns5curedloans as the assessee failed to prove genuineness of the loans at the time of assessment and during the course of remand report by ignoring the decision of Hon'ble Apex Court in the case Sumati Dayal Vs CIT (214 ITR-801) and Hon'ble High Court of Chhattisgarh in the case of Kushal Prase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appreciating the full facts of the case c. addition of Rs. 5 0000/- on account of unverifiable expenses without appreciating the full facts of the case d. addition of Rs. 1 0802164/- under section 68 of the income tax act as unexplained unsecured loan is assessee failed to prove genuineness of the loan and ignoring the judicial precedent. 4. On the first issue of addition on account of valuation difference, the assessing officer has made addition of Rs. 1 16047/- to the closing stock on the basis of the valuation of the closing stock of runner riser made by the sister concern of the appellant. The learned assessing officer observed that assessee has not given reasonable basis at all for changing the valuation of the stock. 5. The learned departmental representative vehemently relied upon the order of learned assessing officer. 6. The learned authorised representative relied upon the orders of the Commissioner of Incoem tax (Appeals) and stated that the closing stock valuation is according to the order of trade tax as well as data of net realizable value from the books of accounts of the assessee company. It was further stated that identical addition has been deleted by the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ested that addition has been made purely on the basis of presumption where the yield and burning loss was fully verifiable and in conformity to earlier years. The sales and purchase of the finished goods and raw materials are on credit base and are fully verifiable. The learned commissioner Appeals deleted the addition holding that when the books of accounts are verified and the sale and purchase of finished goods and raw materials are also verifiable and are in conformity with the yield and the process loss the addition is not sustainable. 9. The learned departmental representative vehemently supported the order of the learned assessing officer and stated that when there is a downfall in the gross profit rate of the assessee company to the previous year and assessee did not furnish any plausible explanation the learned assessing officer has correctly made the addition on account of low gross profit. 10. The learned authorised representative relied upon the orders of the learned Commissioner of Income tax (Appeals) and submitted that the audited results were produced which are fully verifiable and are also subject to excise. He further stated that there is no difference in the yi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned AO. Even otherwise, we are of the view that those expenses should have been disallowed for which assessee failed to produce cogent evidence. Such instances should have been noted by the learned assessing officer and disallowance to that extent should have been made. The disallowance made by the learned AO is merely based on estimation. Such ad hoc disallowance as such cannot be sustained. Therefore, we do not find any infirmity in the order of the learned commissioner appeals in deleting the addition of Rs. 50,000. The ground number three of the appeal is dismissed. 15. The last ground of appeal is with respect to the addition of Rs. 1 0802164 made by the learned AO under section 68 of the income tax act. During the course of assessment proceedings, the learned assessing officer noted that unsecured loans have increased during the year compared to last year. The learned assessing officer noted that during the year assessee has in nine accounts amounting to Rs. 1 0802164/- is credited on last day of the year. The assessee also received during the year Rs. one crore from dealers securities deposit. The assessee filed copies of the account as appearing in the books of accou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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