TaxTMI 
TaxTMI 
2017 (3) TMI 1228
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....a Private Limited Company, engaged in transportation business has filed its return of income declaring total income of Rs.9,79,92,809/-. Subsequently, the case was selected under scrutiny CASS module and accordingly issued notice u/s. 143(2) / 142(1) of the Act upon the assessee. The assessment was framed u/s. 143(3) at a total income of Rs.12,33,53,380/- after making certain additions / disallowances which are discussed here in below:- 4. First issue raised by assessee in Ground No. 1 & 2 is that Ld. CIT(A) erred in confirming the order of Assessing Officer by sustaining the disallowance of Rs. 1,25,30,287/- towards repair expense on the rented premises. The assessee without prejudice to above also submitted to treat the said repair expense as capital in nature and prayed for the allowance of depreciation thereon. The assessee has incurred an expense of Rs.1,25,30,288/- on repair & maintenance for its go-down taken on lease. The details of such expenses are reproduced below:- Sl. No. Godown at Amount w/off during the year INR Name of landlord Monthly rent INR 1 Ankurhati (Bombay Road) WB 255990 Chandu Somani 75000 2 Salap (Bombay Road) WB ....
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....isallowed by the AO on the ground that the assessee failed to furnish the necessary details in support of aforesaid repair expenses. The action of the AO was subsequently confirmed by the ld CIT(A). The ld AR before us alternatively submitted that the said expenses can be treated as capital in nature and the depreciation thereon can be allowed. The ld AR in support of his contention has also submitted that the issue is already covered by the order of Hon'ble ITAT in the assessee's own case (supra). However, on perusal of the aforesaid ITAT order we find that there was no dispute about the genuineness of the expenditure but in the instant case the assessee failed to establish the genuineness of the expenditure. Therefore, the order of the Hon'ble ITAT is distinguishable as the facts of both the cases are different. The question to treat the 'current repair' as capital expenditure arises only when the assessee establishes the genuineness of the expenses. As in the case before us the assessee failed to furnish the necessary details in support of its claim before the lower authorities, therefore the plea for depreciation cannot be entertained. However, now the ld AR has submitted the l....
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.... Nil 10-11 42284.22 190.67 Nil 13.57 Nil 183.53 Nil 11-12 49310.97 169.72 1.50 16.00 0.50 147.98 1.00 On the other hand, Ld. DR vehemently supported the order of Authorities Below. 12. We have heard the rival contentions of both the parties and perused the materials available on record. The issue in the present case relates to the disallowance made by the Authorities Below on account of non-production of supporting evidence. Therefore, disallowances were made on ad hoc basis. It is the duty of the assessee to submit the documents in support of the expenditure claimed in profit and loss account. In the absence of such documents, the authenticity of the expenses cannot be established. Therefore the disallowances are warranted. However, before making the disallowances it should be based on some reasonable basis. To form the reasonable basis, it is imperative to refer the historical data of the assessee and to refer the books of account. If the expenses claimed by assessee in the year under consideration are excessive in comparison to earlier years and also do not commensurate with the turnover of the assessee then disa....
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....that the necessary supporting documents were not available with the assessee. Therefore the AO treated the same as undisclosed income and added to the total income of the assessee. 16. Aggrieved, assessee preferred an appeal before Ld. CIT(A). The assessee before Ld. CIT(A) submitted the expenditure on repair & maintenance was representing the current repairs and it was duly accounted for in the books of account and tax audit report. The AO has found no defect in the books of account while framing assessment proceedings and Ld. CIT(A) after considering the submission of assessee has deleted the addition made by the AO by observing as under:- "... ... I have perused the assessment order and copy of the tax audit report produced in course of the appellant proceedings. I find that sum of Rs. 125.30 lakhs is reflected in schedule "D" Fixed Assets to the tax audit report under the head "Development of Tenanted Property". This fact has also been acknowledged by the AO in his assessment order whether the sum of Rs. 1,25,30,287/- was related to current repairs or investment in tenanted property, the fact remains that the same is duly reflected in the statement of account of the asses....