Appeal partially allowed, relief on expenses, undisclosed income confirmed, reassessment directed based on DVO report.

The Tribunal partly allowed the appeal, providing relief by overturning the disallowance of loading and unloading expenses and modifying the disallowance of diesel expenses. Other additions, such as undisclosed income from advances to employees and undisclosed investment, were confirmed. The Tribunal directed reconsideration of the addition based on the Departmental Valuation Officer (DVO) report, emphasizing the need to verify the books of accounts. The general grounds regarding interest and penalty were considered consequential, and the Tribunal directed the Assessing Officer accordingly.

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Issues Involved:
1. Jurisdiction and validity of the assessment order under Section 153A.
2. Disallowance of loading and unloading expenses.
3. Disallowance of diesel expenses.
4. Addition based on the Departmental Valuation Officer (DVO) report.
5. Addition of advances given to employees.
6. Addition of undisclosed investment.
7. General grounds including interest and penalty.

Issue-wise Detailed Analysis:

1. Jurisdiction and Validity of the Assessment Order under Section 153A:
The assessee challenged the legality of the assessment order under Section 153A, claiming it was without jurisdiction and invalid since it was based on regular books of accounts examined earlier and not on any search material. However, these grounds were not pressed by the assessee's representative and were thus dismissed.

2. Disallowance of Loading and Unloading Expenses:
The assessee firm engaged in Cold Storage business faced disallowance of Rs. 84,277/- out of loading and unloading expenses due to unsupported vouchers. The AO disallowed 20% of the claimed expenses, suspecting enhancement to reduce tax liability. The CIT(A) upheld this disallowance. However, the Tribunal found that such adhoc disallowance was not sustainable in law without contrary material evidence. The Tribunal deleted the addition, emphasizing that the expenditure was laid out wholly and exclusively for business purposes.

3. Disallowance of Diesel Expenses:
The AO disallowed 10% of the diesel expenses amounting to Rs. 47,268/-, citing unsupported vouchers. The Tribunal referred to a previous ITAT order in the assessee's case, which restricted such disallowance to 5%. Following this precedent, the Tribunal modified the disallowance to 5% of the expenses.

4. Addition Based on DVO Report:
The AO made an addition of Rs. 4,85,975/- based on the DVO's report, which was contested by the assessee. The Tribunal noted that the books of accounts were not rejected and no incriminating material was found during the search. Citing the Supreme Court and Rajasthan High Court judgments, the Tribunal held that without rejecting the books of accounts, the AO could not refer the matter to the DVO. The issue was sent back to the AO for reconsideration, directing him to verify the books of accounts.

5. Addition of Advances Given to Employees:
The AO added Rs. 40,500/- as undisclosed income based on advances given to employees not recorded in the books. The assessee had agreed to this addition during the assessment proceedings. The Tribunal upheld the addition, noting that the assessee had no grievance against this agreed addition.

6. Addition of Undisclosed Investment:
The AO added Rs. 10,000/- as undisclosed investment based on a register found during the search, which the assessee could not reconcile with the books of accounts. The Tribunal confirmed this addition, emphasizing the failure of the assessee to reconcile the entry.

7. General Grounds Including Interest and Penalty:
The grounds related to charging of interest under Sections 234A, 234B, and 234C, and initiation of penalty under Section 271(1)(c) were considered general and consequential. The Tribunal directed the AO accordingly.

Conclusion:
The appeal was partly allowed and partly allowed for statistical purposes. The Tribunal provided relief on the disallowance of loading and unloading expenses and modified the disallowance of diesel expenses, while confirming other additions and directing reconsideration of the addition based on the DVO report.

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