ITAT Rules in Favor of Assessee: Deletes Additions & Dismisses Revenue's Cross-Appeal on Stock & Expense Discrepancies.
SHYAM OIL CAKE LTD. Versus ASSISTANT COMMISSIONER OF INCOME TAX.
SHYAM OIL CAKE LTD. Versus ASSISTANT COMMISSIONER OF INCOME TAX. - TTJ 083, 414, [2004] 3 SOT 594 (JODH.)
Issues involved:Cross-appeals by assessee and Revenue against CIT(A) order for asst. yr. 1991-92.
Assessee's Appeal:1. Addition u/s 40A(2)(b) of Rs. 1,37,785: AO added 3% of purchases due to related concerns of directors. Tribunal found no basis for higher price conclusion, deleted addition.
2. Disallowance of interest of Rs. 54,122: AO linked interest to interest-free advances, but no nexus established. Tribunal deleted disallowance.
3. Discrepancies in stocks of Rs. 2,38,000: AO added amounts for process loss without justification. Tribunal found purchases vouched, consumption reasonable, and deleted addition.
4. Disallowance of Rs. 14,200 (telephone) and Rs. 17,890 (vehicle maintenance): Deleted as no personal use in company's expenses.
Revenue's Appeal:1. Deletion of Rs. 1 lakh addition for excess loss in consumption: AO rejected loss declared by assessee, but Tribunal found no discrepancy and upheld CIT(A)'s decision.
In conclusion, assessee's appeal allowed, Revenue's appeal dismissed.