TaxTMI 
TaxTMI 
2015 (5) TMI 418
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....xpenses. (3) That the Commissioner of Income Tax (Appeals), Bareilly has erred on facts and in law in deleting the addition of Rs. 2,28,500/- on account of travelling expenses, Rs. 17,810/- on account of difference in payment of salary though the same was explained to auditors & ID A.O., the addition of Rs. 9,60,236/- out of expenditure incurred by assessee without considering needs, exigencies and reasonableness of payments, Rs. 53,850/- on account of capital expenditure debited by the assessee to profit & loss account. (4) That the Commissioner of Income Tax (Appeals), Bareilly has erred on facts and in law in deleting the addition of Rs. 1,25,707/- u/s 40A(3) without taking into consideration the real facts and documentary evidence as mentioned by the assessing officer in the assessment order. (5) That the Commissioner of Income Tax (Appeals), Bareilly has erred in law and on facts in deleting the addition of Rs. 5,11,227/- rightly made by the assessing officer on account of Surplus/Deficit as per Cash System. (6) That the Commissioner of Income Tax (Appeals), Bareilly has erred in law and on facts in deleting the addition of Rs. 21,480/- made by the assessing office....
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....diture u/s 40A(3) 21,480 Para 16 to 17, Pages 10 to 11 5. We have gone through the tribunal order in assessee's own case for A.Y. 2007 - 08 and find that the assertion of the assessee is correct. The issue involved in Ground No. 1 here was decided by the tribunal on this basis that the assessee was following cash system of accounting till A.Y. 2006 - 07 and the same was changed to mercantile system from A.Y. 2007 - 08. In that year, the tribunal approved the change in accounting system. In the present year, it is observed by the learned CIT (A) that this addition is on hypothetical basis as there is no change in accounting system in the present year. This finding of learned CIT (A) could not be controverted by the learned DR of the revenue and hence, we find no reason to interfere in the order of learned CIT (A) on this issue. Accordingly, Ground No. 1 is rejected. 6. Regarding Ground No. 2 also, we find that similar disallowance was made in A.Y. 2007 - 08 by making similar observations by the A.O. and were deleted in that year by learned CIT (A) with a clear finding that simply because the name of a doctor is missing from the list submitted to DCI/MCI, salary....
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....inding is given by CIT (A) that the assessee had explained that looking to the nature of expenses, its magnitude and volume and the nature of charitable activities in which the assessee is engaged, some vouchers may not be available. Learned CIT (A) has given a categorical finding that for expenses such as Mess, Generator, Staff Welfare and travelling etc., self made vouchers are also sufficient if the volume is small of such self made vouchers. Thereafter, he deleted this addition by observing that since no claim of bogus expenditure has been found by the A.O., addition is not justified. We do not find any infirmity in the order of learned CIT (A) on this issue in the facts of the present case because the activities of the assessee are charitable and considering the nature and volume of expenses. Hence, we do not find any reason to interfere in the order of learned CIT (A) on this issue. Accordingly, on this issue also, Ground No. 3 is rejected. 10. Regarding fourth issue in Ground No. 3 of Rs. 53,850/-, we find that this addition was made by the A.O. on this basis that these expenses are of capital nature. sufficient supporting are not available. This finding is given by CIT (....
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....s on hypothetical basis as there is no change in accounting system in the present year. This finding of learned CIT (A) could not be controverted by the learned DR of the revenue and hence, we find no reason to interfere in the order of learned CIT (A) on this issue. Accordingly, Ground No. 5 is rejected. 13. Regarding Ground No. 6, we find that similar disallowance was made in A.Y. 2007 - 08 also by making similar observations by the A.O. and were deleted in that year by learned CIT (A). This order of learned CIT (A) in that year was confirmed by the tribunal. In the present year also, the basis of disallowance by the A.O. and deletion by CIT (A) is same. In the present year also, Learned DR of the revenue could not point out any specific defect in the order of learned CIT (A) on this issue and no difference in facts could be pointed out by him. Hence, we do not find any reason to take a contrary view in the present year. Accordingly, Ground No. 6 is also rejected. 14. Regarding Ground No. 7, we find that this disallowance is in respect of loss on sale of Maruti Car. The same was deleted by earned CIT (A) by observing that since the loss is suffered on a business asset, the ....
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....in deleting the addition made by the assessing officer at Rs. 12,76,355 on account of salary expenses. (4) That the Commissioner of Income Tax (Appeals), Bareilly has erred on facts and in law in deleting the addition of Rs. 8,000 on account of unexplained waive off. (5) That the Commissioner of Income Tax (Appeals), Bareilly has erred on facts and in law in deleting the addition of Rs. 35,464/- made by the assessing officer on account of Surplus/Deficit as per Cash System Accounting. (6) That the Commissioner of Income Tax (Appeals), Bareilly has erred on facts and in law in deleting the addition of Rs. 54,40,659/- made by the assessing officer out of Revenue Expenses in cash having no supporting vouchers or any evidence. (7) That the Commissioner of Income Tax (Appeals), Bareilly has erred on facts and in law in deleting the disallowance of Rs. 82,481/- on account of written off bad debts. (8) That the Commissioner of Income Tax (Appeals), Bareilly has erred on facts and in law in deleting the disallowance of Rs. 2,09,703/- made by the assessing officer on account of salary made without deducting TDS. (9) That the Commissioner of Income Tax (Appeals), Bareilly h....
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....es 11 to 12 & 27 9 Difference in Salary & Form 16 27,800 Para 38 to 39, Pages 28 10 Capital Expenditure in Cash having no supporting 4,53,596 Para 47 to 48, Pages 30 11 Capital Expenditure u/s 40A (3) 4,79,338 Para 16 to 17, Pages 10 to 11 19. We have gone through the tribunal order cited by the assessee. We find that all these issues were decided by the tribunal in favour of the assessee in A.Y. 2007 - 08. No difference in facts could be pointed out by learned DR of the revenue and hence, we do not find any reason to take a contrary view in the present year on any of the issues. 20. In the result, the appeal of the revenue is dismissed. 21. Now, we take up the appeal of the revenue for A.Y. 2006 - 07 in ITA No. 345/LKW/2014. The grounds are as under:- (1) That the Commissioner of Income Tax (Appeals), Bareilly has erred on facts and in law in deleting the addition of Rs. 38,032/- u/s 40A(3) of I.T. Act, 1961 without taking into consideration the real facts and documentary evidence. The addition was rightly made by the assessing officer on account of disallowance of expenses u/s 40A(3) of I.T. Act, 1961. (2) That the Comm....