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TMI Blog2021 (7) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... nd on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be deleted. 2. Rs. 3,14,300/- The ld. CIT(A) erred in law as well as on the facts of the case in confirming the very action taken u/s 145(3) and applying the GP Rate of 1.66%, which is bad in law without jurisdiction and being void ab-initio, the same kindly be quashed. Consequently the impugned trading additions made u/s 143(3) also kindly be quashed. 3. Rs. 2,23,840/-: The Id. CIT(A) erred in law as well as on the facts of the case in confirming the disallowances of the following expenses claimed by the making:- S.No. Head of Expenses Expenses claimed by the assessee (Rs.) 3.1 Depreciation on Tanker 1,28,031/- 3.2 Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with the tax audit report and has also submitted daily stock summary of motor spirit and high speed diesel. Regarding the allegation of the Assessing Officer that the assessee has shown excess shortage, it was submitted that the assessee has maintained complete record as per prescribed format by the oil company. Moreover, the surprise verification are conducted by the oil company from time to time and the shortage so claimed by the assessee are as per tolerance limit provided by the oil company. It was accordingly submitted that there is no valid basis for invocation of section 145(3) of the Act and rejection of books of accounts. It was further submitted that even where the books of accounts are rejected, the Assessing Officer is requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsurance and Rs. 32,988/- for interest paid to TATA finance for purchase of tanker. It was submitted that the AO has disallowed these expenses alleging that the assessee has failed to produce any evidence regarding the fuel for use of tanker and also failed to furnish evidence w.r.t. use of tanker for business purchases. It was further submitted that the concept of "put to use" of an asset is limited to claim and calculation of deprecation only and does not extent to expenses claimed under section 37(1) which specifically states that any expenditure laid out or expended wholly and exclusively for the purpose of the business or profession shall be allowed. The AO has raised no objection and rather admitted that the payment has been made duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough assessee's submission and AO's findings. The AO did bring out specific instances of discrepancy in traded items like petrol and diesel and the shortage claimed vis a vis other dealers of the same area. The appellant has not been able to come up with any further reasoning to counter the findings of the AO in the course of the appellate proceedings and has not even represented despite several notices for hearing in 4 years since filing of the appeal. Under the circumstances, I see no reason to disagree with the findings of the AO in rejecting the books of the appellant u/s 145(3) and estimation of his profits considering the lack of proper explanation for lower GP as compared to peer traders in the same area, non maintenance of prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d better gross profit rate of 1.52% as compared to average of past three years GP rate of 1.44% and even where the books of accounts are rejected, there is no basis for making the addition in the hands of the assessee. Therefore, leaving the question of rejection of books of accounts open as the same has become more academic in nature, the addition so made amounting to Rs. 3,14,300/- is directed to be deleted. 7. Regarding claim of depreciation and other expenses relating to tanker amounting to Rs. 2,23,840/-, on perusal of explanation and documentation placed on record, we find that there is no merit in disallowance of the said expenses and the same are directed to be deleted. In the result, the appeal of the assessee is partly allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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