AI Drafter 
TaxTMI 
TaxTMI 
2016 (8) TMI 607
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....'Carriage Outward' by following the footsteps of the ld. AO only and without assigning any cogent reason whatsoever. 3) That in the facts and circumstances of the case, the ld. CIT(A) erred in enhancing the addition of Rs. 3,15,026/- as made on estimate by the ld. AO in the assessment order under the head 'Home Biri Labaour'. 4) That in the facts and circumstances of the case, the ld. CIT(A) erred in enhancing the addition on estimate @ 5% of the total expenditure made for Rs. 6,07,49,596/- under the head 'Home Biri Labour', without considering the explanations and submissions made by the assessee. 5) That in the facts and circumstances of the case, the ld. CIT(A) erred in enhancing the addition under the head 'Home Biri Labour' amounting to Rs. 30,37,480/- in spite of examining and verifying the facts and other materials available in the records. 6) That in the facts and circumstances of the case, the ld. CIT(A) was arbitrary, unjust, unlawful and absolutely based on surmises. 7) That the order passed by the ld. CIT was bad in law, unjust and contrary to the facts and records. 8) That the assessee craves to urge such other ground or grounds before or at the time ....
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....Below. 6. We have heard the rival parties and perused the materials available on record. From the foregoing discussion, we find that disallowance was made by the Authorities Below due to non-production of evidence in support the expenditure claimed. The ld. AR has also not brought anything even before us in support of the aforesaid expenditure. Considering the facts and circumstances of the case, we find no reason to interfere in the order of Ld .CIT(A). Hence, ground raised by assessee is dismissed. 7. Next issue raised by assessee in this ground is that L'd CIT(A) erred in confirming the action of AO for the disallowance of Rs. 1,80,719.00 on account of carriage outward. 7.1 The assessee for the year under consideration has claimed an expense of Rs.29,67,915/- under the head 'carriage outward'. However, assessee failed to produce supporting evidence in respect of above expense to the extent of Rs.1,80,715/- which was accordingly disallowed by AO and added to the total income of assessee. 8. Aggrieved, assessee preferred an appeal before L'd CIT(A) whereas assessee submitted that expenditure incurred for the purpose of carriage of the goods from factory to the differen....
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....ere disallowed on estimated basis. However, at the same time, we also understand that many times the proper vouchers in support such kind of expenses are not available. Therefore in the absence of supporting vouchers, we need to look other factors before making any disallowance like nature of business, history of the expense claimed in earlier years, audited financial year statement etc. In the instant case, assessee has produced all the documentary evidence in support of its expenditure except the aforesaid amount of Rs.1,80,719/- which is just 1.18% of the total turnover of assessee business. At the same time, we cannot ignore that similar expenses were claimed in the earlier AY and this year, the expense claimed by assessee are in commensuration with earlier year expense. We find force in the argument raised by L'd AR that there was a slightly increase in the aforesaid expense and that too mainly increase in the fuel cost and other escalated cost. However, it is also important to note that the documentary evidence was not placed before the lower authorities. Now, in the interest of natural justice and fair play, we after considering the totality of the facts of the case as discu....
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....nth. However, L'd CIT(A) has disallowed 5% of such expense and enhanced the total income of assessee by observing as under:- "I carefully considered the material before me. I found that the appellant debited Rs. 6,07,49,596/- as Home BiriLabour and AO disallowed Rs. 43,15,026/- as non genuine expenses. During the appellant proceeding the A/R was asked to filed the detail of Rs. 6,07,49,596/- of Home Biri Labour along with supporting evidence. The appellant not filed any detail along with the supporting evidence from the genuineness of the expenses prove. The appellant filed the method of payment and basis of the wages. The detail of the wage never produce. The genuineness of the expenses may examine on the basis of voucher. The name of labour and signature of the recipient but the appellant failed to file any documents which established that the expenses are genuine. In the absence of the supporting voucher, I am the view that the Home Biri Laboour expenses are not fully genuine. Hence, I issued a enhancement notice treating 5% of Home Biri Labour expenses as not genuine. Considering the above findings and facts of the case, I am the view that 5% of Home Biri Labour expenses ....
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....at payment of wages were supported with the payment of P.F., the assessee was also assessable under the Excise Act and assessee has paid excise duty on the production of bidi, in the earlier years such expenditures were claimed but no such disallowance was made by Authorities Below. There were also proceedings against assessee u/s 263 of the Act which was finally dropped by Revenue. The home bidi expenses were decided in terms of tripartite agreement which was made in the presence of Labour Commissioner of Govt. of West Bengal. As per the submission of assessee as recorded in the appellate order that one month details in support of expense was submitted. In view of above, we find that L'd CIT(A) has failed to consider the above stated facts before enhancing the disallowance made by AO and we find lot of force in the argument raised by L'd AR that L'd CIT(A) has enhanced the income by disallowing the expense on estimate basis. In this connection, we are also putting our reliance in the judgment of Hon'ble Supreme Court in the case of Dhakeswari Cotton Mills Ltd. (supra). The relevant extract of the order is reproduced below. "The ITO is not barred by technical rules of eviden....