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TMI Blog2019 (7) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... substantial questions of law in its memorandum of the Tax Appeal : "[A] Whether the Appellate Tribunal has substantially erred in law and on facts in holding that the disallowance to the extent of inflated expenses will adequately cover the unexplained peak amount of investment made in the bogus purchase and no separate addition on account of unexplained investment could be made, thereby deleting the addition of Rs. 1,33,16,112/- made on account of unexplained investments? [B] Whether the Appellate Tribunal has substantially erred in law and on facts in deleting the addition of Rs. 22,04,897/- made on account of under valuation of stock? [C] Whether the Appellate Tribunal has substantially erred in law and on facts in deleting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holding the rejection of books of accounts on the basis of AO's finding. With regard to purchases from Ms. Santoshi Bhandar, it is noticed from the Sales Tax Authorities as well as DOT, Berhamur that said concern was not doing any business in oil cake nor it was found on the address given by the assessee, therefore in the light of preponderance of evidences available in the case of assessee and also the fact that Director of the assessee company was not able to explain the purchases from M/s. Santoshi Bhandar and his reply which has been reproduced by the AO at page 10 & 11 of the assessment order evasive, misleading and having with alterior motive, Therefore, findings of the CIT(A) that the assessee has not made any purchases from M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h respect to total expenses which worked out to Rs. 7,88,978/-. Similarly octroi @ 2.05 of purchase of Rs. 6,65,80,561/- was calculated at Rs. 1,66,451/- and packing material considered for 5 per pack at Rs. 7.08,735/-. Accordingly the CIT(A) has quantified investment on purchases price at Rs. 29,95,775/ considered the same for addition as unexplained expenditure as against the amount of Rs. 20,30,568/ computed by the AO. The CITYA) further observed that in view of decision of ITAT in the case of Vijay Proteins Ltd., afor AY 1991-92 where the peak amount of purchase at Rs. 10,08,844/-on 10.05.1997 is less than the confirmed addition, hence, the total addition was confirmed at Rs. 29,95,775/- and balance addition out of Rs. 1,33,16,116/- was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rked out under valuation of closing stock at Rs. 27,66,485/- and made addition to the total income. However, in appeal the assessee has claimed that the AO has not considered the goods received in Gunny Bags were including cost of Gunny Bags. The assessee follows the practice of increasing the quantity of Gunny Bags thereby including the same in the Gunny Bags, therefore stock valuation of different items be done excluding the value of Gunny Bags from the amount, accordingly the CIT(A) has deleted the addition in respect of Gunny Bags at Rs. 2242/- which we find in order. It was further noticed by the CIT(A) that the AO has taken value of goods to be exported on the basis of sale bills issued which is against the basic principle accountancy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d after arrived at a fair reasonable valuation of closing stock, hence the findings of the CIT(A) in reducing the closing stock to Rs. 5,61,588/- from Rs. 27,66,485A is therefore upheld. Consequently, Ground No.2 of the Revenue appeal is therefore dismissed and resultantly the Ground No.4 of the Cross Objections is also to be dismissed." 6. The third question relates to deleting the addition of Rs. 8,437/- made on account of the motor car expenses and depreciation. The Tribunal took the view that the CIT(A) correctly deleted the said addition. In such circumstances, the Tribunal thought fit not to interfere. 7. Having heard Ms. Bhatt, the learned senior standing counsel appearing for the Revenue and having gone through the materials on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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