TaxTMI 
TaxTMI 
2018 (8) TMI 1045
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.... Tax Act, 1961 (hereinafter referred to as "the Act") for rectification of the order dated 16.11.2006 passed by the Assessing Officer (AO) has been rejected. 2. The brief facts relating to the appeal is this that the assessee has filed its return of income for the AY 2004-05 on 01.11.2004 showing loss of Rs.(-)56,80,981/-. Upon scrutiny, notices were sent to the assessee including show-cause notice dated 05.10.2006. Since nothing was forthcoming from the assessee ex-parte order was passed by the Assessing Officer (AO) to the effect as follows:- "5. Indirect Expenses:- The company has debited Indirect Expenses of Rs. 95,30,347/- to the profit and loss account as detailed under schedule L to P&L, account, which includes t....
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....roceedings u/s.271(1)(c) are initiated. 6. Bad Debts written off of Rs. 13,51,685. The assessee was specifically asked to explain the Bad debts of Rs. 13,51,585 vide Q.No.11(vii) this office letter dated 10.07.2006, dated 31.07.2006 and thereafter vide Q.No.5(vii) of Final show cause dated 05.10.2006. There was no response from the assessee. Therefore, the claim remains unexplained, unproved and unsupported by any evidences. 7. Since the above two additions have the effect of concealing the particulars of income and the addition there off results into reducing the loss declared in the return of income. It is held that tax that would have been chargeable on the income in respect of which particular have been concea....
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....as stated that almost all the expenses have been made in cash and no supporting bills and vouchers are furnished by the assessment proceedings. Some of the copies of ledger accounts are illegible. Thus, complete verification of the expenses debited under the various head of the indirect expenses are not possible, hence, the A.O. was justified in making the disallowance at 40% of these expenses. This has been refuted by the appellant in his rejoinder to the remand report. These issues are taken up as follows: (i) So far as provision made for expenses are concerned, the appellant in his submission had itself admitted that the amounts of Rs. 5,61,9111/- pertain to the prior financial year as it was a balance as on 01.04.2003. Hence, t....
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....l was disallowance of Rs. 36,74,875/- being 50% of the total indirect expenses incurred during the year. It was explained during the appellate hearing that while making disallowance out of Indirect Expenses the Assessing Officer has disallowed Rs. 11,32,997/- being the provision for expenses. It was explained that out of the said expenditure Rs. 5,61,911/- was the opening balance as on 1-4-2003. The said item viz. 11,32,997/- was a Balance Sheet item and never entered the Profit & Loss Account of the year under consideration. It was explained that the expenditure to the extent of Rs. 5,71,096/- only was debited to the Profit & Loss Account under this head during the year. b) In view of the above, it is submitted that while....
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....ch by and under an order dated 10.12.2015 with the following observation: "4. On appeal, the ld.CIT(A) has restricted this disallowance to Rs. 22,55,435/-. This is the 50% of the expenditure which were incurred in cash. 5. With the assistance of the learned representatives, we have gone through the record carefully. It is pertinent to note that that section 144 would suggest that in order to estimate income, learned Assessing Officer has to exercise his discretion which should be in consonance with best of his judgment. We are conscious of the fact that in various authoritative pronouncements, it has been propounded that in making a best judgment assessment, the Assessing Officer must not act dishonestly or vindictively or....