TaxTMI 
TaxTMI 
2017 (5) TMI 1313
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....s. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) ignored the observation of the AO, by restricted the addition made by AO for expenses of the car running expense and depreciation on car upto 30% that Rs. 1,54,519/- to Rs. 1,03,012/- i.e. 20% and thereby giving the relief of Rs. 51,507/- on this account to assessee. 5. On the facts and in the circumstances of the case, the Ld. CIT(A) has ignored the observation of AO by deleting the addition made by AO of Rs. 11,165/- on account of expenses under tour and travelling expenses. 6. The appellant crave leave to add, allow or amend any / all the grounds of appeal before or during the course of hearing of the appeal. 2. The brief facts of the case are that the assessee has furnished a return on 25.9.2009 by declaring net taxable income of Rs. 4,74,906/- and claimed a refund of Rs. 1,794/- out of TDS of Rs. 61,185/-. The return was processed u/s. 143(1) on 21.2.2011. The assessee's return was selected for scrutiny under CASS. Accordingly, notice u/s. 143(2) of the I.T. Act, 1961 dated 24.8.2010 was issued by ACIT, Circle 35(1), New Delhi. The notice u/s. 143(2) of the I.T. Act, 1961 dated 28.9.2010 was al....
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....a Ld. DR and perusing the records. 6. We have heard Ld. DR and perused the relevant records, especially the order of the Ld. CIT(A). We find that Ld. First Appellate Authority has elaborately discussed and adjudicated the issues no. 2 to 5 vide para no. 9 to 18 at page no. 7 to 11 in the impugned No. 1, which read as under:- "9. I have carefully considered the submissions of the appellant, the observations made by the AO in the Assessment order and facts of the case. In terms of section 41(1) of the Act if a benefit is obtained by an assessee by way of remission or cessation in rest of trading liability in respect of which allowance / deduction has been made in an earlier year than in the year of such benefit the value of the benefit is deemed as profits and gains of the assessee's business. In the appellant's case, neither there was remission nor was there any cessation of the liabilities which were being shown by the appellant as payable, therefore, the appellant had not obtained any benefit in respect of the various liabilities as noted above. The only reason mentioned by the A.O. for making this addition is that the balance in the accounts of these sundry creditors was th....
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.... Rs. 17,200/- as not relating to the appellant's business on examination of various vouchers but he has not pointed out any specific instance of any expense which was not related to the appellant's business. In the absence of the same disallowance made by the A.O. cannot be sustained and the same is deleted. Ground No.3 - Disallowance o fRs 1,54,519/- on account of car running and depreciation 14. The appellant had claimed an amount of Rs. 1,74,558/- on account of car running and maintenance expenses and Rs. 3,40,504/- was claimed on account of depreciation on three cars. The A.O. disallowed 30% of these expenses on the ground that the appellant's claim on account of car running and maintenance expenses and depreciation on the same was excessive as the appellant was having three cars. 15. In response to this disallowance the appellant has submitted that disallowance made by the A.O. was adhoc and unreasonable. The appellant relied on the decision of the Hon'ble Supreme Court in the case of State of Madras vs. G J Coelhi 53 ITR 186 (SC), wherein it was held that personal expenses are those that relate to the person of the assessee to satisfy his personal nee....
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....ppellant, the observations made by the A.O. in the Assessment Order and the facts of the case. The disallowance of Rs. 11,265/- has been made by the A.O. by observing that examination of the vouchers revealed ineligible nature of the expenses to this extent. However, no specific instance of disallowable nature has been pointed out by the A.O. nor has he brought on record any evidence in support of these observations. Therefore, disallowance of Rs. 11,265/- made on this account is deleted." 7. On going through the aforesaid findings of the Ld. CIT(A), with regard to ground no. 2 relating to deletion of addition made by AO u/s. 41(1) of Rs. 84,10,126/- in respect of cessation of liability in respect of sundry creditors is concerned, we find that in terms of section 41(1) of the Act if a benefit is obtained by an assessee by way of remission or cessation in rest of trading liability in respect of which allowance / deduction has been made in an earlier year than in the year of such benefit the value of the benefit is deemed as profits and gains of the assessee's business. In the assessee's case, neither there was remission nor was there any cessation of the liabilities which were be....
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....aintained and disallowance made by the A.O. is on adhoc basis. No specific instance of disallowable expenses was brought on record by the A.O. We note that though the A.O. has mentioned in the assessment order that he had found an amount of Rs. 17,200/- as not relating to the assessee's business on examination of various vouchers but he has not pointed out any specific instance of any expense which was not related to the assessee's business. In the absence of the same disallowance made by the A.O. cannot be sustained and the same was rightly deleted, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) on the issue in dispute and reject the ground no. 3 raised by the Revenue. 9. With regard to ground no. 4 relating to Disallowance of Rs. 1,54,519/- on account of car running and depreciation is concerned, we find that the assessee had claimed an amount of Rs. 1,74,558/- on account of car running and maintenance expenses and Rs. 3,40,504/- which was claimed on account of depreciation on three cars. The A.O. disallowed 30% of these expenses on the ground that the appellant's claim on account of car running and maintenance expenses and ....