2018 (6) TMI 1028

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... was selected for scrutiny under CASS. During the course of assessment proceedings, the Assessing Officer called for details with regard to purchases of Rs. 8.09 crores made from sister concern M/s. Sat Saheb Cotton Factory. The Assessing Officer compared the rates of purchases made from the sister concern with the prevalent market rates of cotton and found that the assessee had purchased cotton at a higher rate from its sister concern. The Assessing Officer proceeded to make a lump sum addition of Rs. 20 lakhs under section 40A(2)(b) of the Income-tax Act, 1961 (in short "the Act"). The Assessing Officer also made a lump sum disallowance of Rs. 25,000 out of telephone expenses, motor cycle expenses, travelling expenses and staff welfare e....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....wance of Rs. 10,000 sustained in respect of telephone expenses, motor cycle expenses, travelling expenses and staff welfare expenses, the learned authorised representative submitted that the disallowance was made on an ad hoc basis without pointing out any specific instances of variation and, therefore, this addition was also liable to be deleted. 4. The learned senior Departmental representative in response placed his reliance on the orders of the lower authorities and submitted that both the disallowances need to be upheld 5. We have heard the rival submissions and have perused the material available on record. As far as the assessee's ground challenging the disallowance of Rs. 2 lakhs under section 40A(2)(b) of the Act is concerned....