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TMI Blog2024 (12) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... n and there is no need to make any ad hoc disallowance thereon. The partners have their own personal vehicles for their personal usage, which fact was brought to the knowledge of Learned CIT(A) and the same had not been disputed by the revenue. Hence the action of the Learned CIT(A) in restricting the disallowance on account of car maintenance expenses to Rs 2 lakhs on an ad hoc basis is devoid of merit and deserves to be deleted at once. Car depreciation - CIT(A) had rightly held that it is an allowance statutorily provided to the assessee in the Act and the same cannot be disturbed by alleging that there is personal usage of the vehicle. The element of personal usage of the vehicle had already been answered to be non-existent in the previous paragraph. Hence, we hold that the CIT(A) had rightly granted relief to the assessee by allowing the depreciation on car, on which we do not find any infirmity. Accordingly, the Ground Nos. 1 and 2 raised by the revenue are dismissed and Ground No. 4 raised by the assessee is allowed. Addition made u/s 69A - HELD THAT:- When there are unaccounted sales mentioned in the seized document, there should be obviously unaccounted purchases, as witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished goods, raw materials and accessories found physically at the premises of the assessee firm at Rs 11,12,45,367/-. During the course of assessment proceedings, the Learned AO calculated the recorded value of closing stock at Rs 5,67,92,915/- by making reverse calculation on the basis of gross profit at the rate of 19.67 percent which was the gross profit rate of earlier year and arrived at the closing stock as on 4-1-2019 on the date of search. Accordingly, the Learned AO proceeded to make an addition of Rs 5,44,07,085/- on the ground of excess stock. 4. The assessee always submitted that there is no excess stock at all and the entire basis of addition is arbitrary and not appreciating the facts of the case. The valuation of inventory prepared by the search party suffered from factual inaccuracies in as much as the certain finished goods have been valued by the search team by applying market rates instead of weighted average cost or market price whichever is lower. Accordingly, it was pleaded that the valuation of closing stock on the date of search arrived by the search team cannot be accepted as sacrosanct. The assessee also submitted before the Learned CIT(A) that the gross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arge 1,04,555/- Gross profit 28.1% of sales 15,09,93,988/- 8. Taking the closing stock figure of Rs 10,20,91,121/- on the date of search as worked out above, the Learned CIT(A) concluded that the excess stock works out to Rs 91,08,879/- only (11,12,00,000 10,20,91,121) as against Rs 5,44,07,085/- worked out by the Learned AO. Aggrieved by this order, both assessee as well as the revenue are in appeal before us. 9. From the above, it could be seen that the closing stock worked out by the learned CIT(A) was Rs 10,20,91,121/- and the correct closing stock ought to have been worked out by the search party as per Table A supra was Rs 10,12,53,736/-. Hence, there is no deficit in stock at all. Accordingly, there is no case for making any addition on the ground of excess closing stock by the learned CIT(A). Hence we have no hesitation in deleting the addition made in the sum of Rs 91,08,879/- on account of closing stock by holding that there is no excess stock at all even as per the workings of learned CIT(A) and by adopting the correct closing stock as on the date of search after eliminating the profit element on finished goods. Accordingly, the Ground Nos. 1 to 3 raised by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artners have their own personal vehicles for their personal usage, which fact was brought to the knowledge of Learned CIT(A) and the same had not been disputed by the revenue. Hence the action of the Learned CIT(A) in restricting the disallowance on account of car maintenance expenses to Rs 2 lakhs on an ad hoc basis is devoid of merit and deserves to be deleted at once. 13. With regard to car depreciation, the Learned CIT(A) had rightly held that it is an allowance statutorily provided to the assessee in the Act and the same cannot be disturbed by alleging that there is personal usage of the vehicle. The element of personal usage of the vehicle had already been answered to be non-existent in the previous paragraph. Hence, we hold that the Learned CIT(A) had rightly granted relief to the assessee by allowing the depreciation on car, on which we do not find any infirmity. Accordingly, the Ground Nos. 1 and 2 raised by the revenue are dismissed and Ground No. 4 raised by the assessee is allowed. 14. No argument was advanced by the Learned AR before us with regard to Ground No. 5 raised by the assessee. Hence the same is treated as not pressed and dismissed. 15. Ground Nos. 6 and 7 ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contentions of the assessee. The Learned AO however disregarded these contentions of the assessee and proceeded to make an addition of Rs 29,56,800/-as unexplained money under section 69A of the Act in the assessment. 18. The Learned CIT(A) observed that the statement given by the assessee at the time of search was never retracted by it. In the statement under section 132(4) of the Act, the assessee's partner had admitted that the jottings mentioned in the seized document represent cash received from three parties totaling to Rs. 29,56,800/-. However, during the course of assessment proceedings, the assessee had taken a contrary stand by stating that those jottings were recorded by one of the employees of the assessee firm at the behest of another partner, Mr. Tarlok Singh, who happens to be brother of the partner who gave the statement originally under section 132(4) of the Act. The Learned CIT(A) took cognizance of the fact that both Mr. Narendra Singh and Mr. Tarlok Singh are partners of the assessee firm and the transaction mentioned in the seized document represent unaccounted sales made by the assessee out of books. Having said that, the Learned CIT(A) in paragraph 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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