2012 (7) TMI 722

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....e addition of Rs.5,00,000/- made by the AO on account of unvouched expenses. 2. Ld. CIT(A) erred in law and on the facts and circumstances of the case in allowing operation software expenses of Rs.5,00,000/- as revenue expense. 3. The appellant craves to amend, modify, alter, add or forego any ground of appeal at any time before or during the hearing of this appeal." 3. Briefly stated, the facts of the case are that the Assessing Officer (for short "the AO") processed the return of assessee u/s 143(1) of the Income Tax Act, 1961 (for short "the Act). The case was selected for scrutiny and notices u/s 143(2) and 142(1) were issued and served upon the assessee but neither the assessee nor his representative attended the proceedings b....

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....order of the CIT(A). The AR submitted that the total expenditure was Rs.24,56,543 but the AO made an ad hoc disallowance of Rs.5,00,000 without assigning any particular reasons. Therefore, its deletion by ld. CIT(A) is just and proper. 6. We have heard both the parties and carefully considered the rival arguments and perused entire material placed before us. The AO made disallowance of Rs.5,00,000 with a finding to cover leakage in respect of unvouched other expenses, without assigning any reasonable basis or cause. On the other hand, the ld. CIT(A) deleted this addition with a finding that the AO made this disallowance without assigning any reason. He noted the increase in the Gross Profit of the assessee which was 54% as compared to....