TaxTMI 
TaxTMI 
2013 (10) TMI 1117
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....n the assessee is regularly seeking adjournment in the case therefore, the assessee is very much aware about the date of hearing of the appeals. In these circumstances we propose to hear and dispose of these appeals ex-parte. 3. The assessee has raised the following grounds: "1) The learned CIT (A) erred in disallowing the revenue expenditure of Rs 2,15,73,054/-. In this respect she ought to have appreciated that the said expenditure being revenue in nature and having incurred during the relevant previous year is fully allowable in computing the profits of the business chargeable to tax. Your appellant humbly prays that the said revenue expenditure of Rs.2,15,73,054/- be allowed as deduction. 2) The learned CIT (A) erred in treating the fixed assets purchased at cost of Rs.5,86,292/- during the year as unexplained expenditure within the meaning of sec 69 C of the I.T. Act 1961 and thereby making the addition of the said amount to the income. In this respect she ought to have appreciated that the expenditure is fully accounted for in the books of accounts and the source of the payments made for the said purchases is also explained a....
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....ng relief of Rs. 1,50,19,1 80/- made by the Assessing Officer on account of unexplained expenditure / investment, disregarding the finding of the Assessing Officer that the requisite details to support the claim were not furnished during the assessment proceedings." 5. Ground No. 1 of the revenue's appeal and the Ground No. 2 and 3 of assessee's appeal are common being addition u/s 69C towards purchase of fixed assets. Therefore, both these grounds are taken up and disposed of together. During the course of assessment proceedings the AO asked the assessee to furnish details of addition to the fixed assets, supporting bills, documentary evidences and dates on which such assets are put to use. The assessee filed the details of the assets purchase during the year under consideration amounting to Rs. 12,41,497/-. However, the assessee could not produce the bills with regard to the addition made during the year to the fixed assets. The Assessing Officer made an addition of Rs. 12,41,497/- u/s 69C of the Income Tax Act by treating the said amount as unexplained expenditure in the absence of supporting evidence. The AO has also disallowed the depreciation thereon amounting to Rs. 4,17,....
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....redited in assets account and it is also pointed out that no depreciation was provided in this credited amount as is evidenced by copy of ledger produced. Bearing the above stated items, no bills or other details are available for the remaining assets. Hence, to the said extent the action of the A.O. in treating the expenditure as not explained and disallowing depreciation thereon is upheld. It has also been submitted by appellant that whenever bills are available the same have been produced before A.O. When the purchases have not been substantiated, the deeming fiction of s. 69C comes into operation and hence the expenditure as claimed with reference to the said asset is treated as deemed income under s. 69C." 8. Thus, it is clear from the above finding that the CIT(A) has deleted the addition in respect of Car, TV and Tankers by considering the facts that the expenditure relates to Car is a margin money paid by the bankers directly to the party whereas in respect of purchase of TV the assessee produce the bill dated 3.7.2006 and the amount in respect of tankers represents discount on purchase of tankers which was given by the party and created in the assets account. The remain....
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....isement expenses 3,47,357 Security charges 21,90,541 Total 1,48,52,249 39,93,309 10858940 Factory lease rent 1,32,50,000 1,66,910 1,30,83,090 Grand total 2,81,02,249 41,60,219 2,39,42,030 "6.2 It is the submission of the appellant that packing materials, printing, and stationery were purchased, no any job work was involved, and hence there was no requirement to deduct tax at source. The appellant has also furnished copies of the ledger accounts relating to packing material and printing & stationery. From the details as furnished it is seen that payments have been made against purchases, it is only a case of sale and not for, carrying out any work. The A.O. has also not brought on record that any work, as envisaged in 194C has been carried out. When there is no element of 'any work' involved Sec. 194C will not apply. Therefore, it is held that packing material and printing and statutory are not subject to TDS. As regards, Transportation and Advertisement, the only ground taken by appellant is that the payments do not exceed Rs. 20,000/-. However, from the material as fu....
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.... has submitted that when the amounts were claimed to have been paid for purchase of assets and other expenses then the addition made by the AO in the absence of any documentary evidence is justified u/s 69C being unexplained expenditure/ investment. Thus, the Ld. DR has submitted that the CIT(A) committed an error in deleting the addition on the ground that the assessee has not claimed expenditure with respect to this amount. He has relied upon the order of the Assessing Officer. 15. Having considered the submissions of Ld. DR as well as the perusal of the orders of the authorities below we find that the reasoning given by the CIT(A) in deleting the addition is not proper. The CIT(A) has decided this issue in para 8 as under: "8. I have considered the matter. The A.O. has brought to tax as income advances made, deferred revenue to be written off, and pre-operative expenses as unexplained expenditure. In the first place, the said items are not in the nature of expenditure and have also not been treated as expenditure. The same have not been claimed as deduction against the total income. When an expenditure has not been incurred, the same cannot be brought to tax a....
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....ntenance which was amortised by the assessee in the books of account for a period of 6 years. However, in the computation of income the assessee claimed the entire expenditure of Rs. 2,58,87,665/- as revenue expenditure. There is no dispute about the fact that this plant was earlier closed and taken over by the assessee when it was not in a functional State. The expenditure has been incurred by the assessee before the use of plant and to make it fit for use. Thus, this expenditure does not fall under the current repairs in terms of section 31 of the Income Tax Act. The AO has allowed 1/6th of the expenditure as deferred revenue expenditure because the benefit of the same is available over the period of 6 years. The CIT(A) has confirmed the action of the AO while deciding the issue in para 4.5 as under: "4.5 During the course of hearing of the appeal, in order to ascertain the nature of the expenditure the appellant was directed to give specific details of the nature of the work carried out in the closed plant. On a perusal of the break of the sum of Rs. 2,58,87,664/- it is seen that extensive work has been carried out on the structure of the factory building as well....