TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 652
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....8,700/- 60,62,300/- 3. Building repair 35,28,000/- 19,37,250/- 15,90,750/- 4. Job work charges 9,09,40,000/- 7,98,46,200/- 1,10,93,800/- 5. Workers welfare 19,13,000/- 14,12,250/- 5,00,750/- 6. Commission and Brokerage 2,00,07,000/- 1,59,76,800/- 40,30,200/- 7. Discount on sales 2,81,35,000/- 2,49,90,000/- 31,45,000/- 8. Vehicle repair and maintenance 46,57,000/- 34,66,050/- 11,90,950/- Total 21,32,40,000/- 17,58,89,700/- 3,73,50,300/- (ii) That the above disallowances have been confirmed despite the fact these expenses have been incurred wholly and exclusively for the purpose of the business of the assessee. (iii) That the above disallowances have been confirmed despite the fact that the disallowances have been made by the AO by grossly indulging into surmises and conjectures without there being any basis for the same. 3. (i) On the facts and circumstances of the case, the learned CIT(A) is erred both on facts and in law in confirming the addition of Rs. 1,06,20,125/- on account of advances from customers treating the same as unexplained liability. (ii) That the above addition has been confirmed rejecti....
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.... general in nature, therefore, Ground Nos. 1 and 6 are dismissed. 6. As regards Ground no.2, relating to the disallowance of Rs. 3,73,50,300/- on ad-hoc basis on account of various expenses incurred during the year, the Ld. AR submitted that the Assessing Officer disallowed expenses on the assumption that expenses increased/decreased in proportion to sales. The Ld. AR further submitted that the Assessing Officer has observed in his order that sales figure has been reduced by 5.62% i.e. from Rs. 3,20,49,20,000/- in F.Y. 2014-15 to Rs. 3,02,90,97,000/- in F.Y. 2015-16. On the same basis, the Assessing Officer compared expense of F.Y. 2015-16 vis-à-vis the F.Y. 2014-15. The Ld. AR submitted that the Assessing Officer held in the assessment order that while the sales have declined, there is an abnormal increase in the expenses and, thus, disallowed the expenditure which is in excess of 1.05% in comparison to F.Y. 2014-15. At the outset, the Ld. AR further submitted that the Assessing Officer has not rejected books of accounts produced by the assessee. These books are audited and no irregularity has been observed by the Assessing Officer. The Ld. AR further submitted that the A....
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....s of advances received from customers alongwith the details of current liabilities. The documents were not doubted. The Ld. AR further submitted that these advances have been cleared in the subsequent years. The sales invoices have been raised in the subsequent years and copies of ledger accounts for three Financial Years i.e. 2014-15, 2015-16 & 2016-17 were submitted before the authorities and the assessee demonstrated that these are regular advances. The Ld. AR submitted that theses parties are regular customers and the assessee has supplied the goods to those parties in the normal course of business and these advances have been adjusted against such supply of goods in the subsequent year. Thus, there cannot be addition holding the same advances as unexplained. The Ld. AR relied upon the decision of Tribunal in case of ACIT vs. Montage Enterprises Pvt. Ltd. (ITA No.4014/Del/2011 dated 14.01.2019). The Ld. AR further submitted that this addition made is on the basis of arbitrariness and by indulging into surmises without providing any cogent reasons. 10. The Ld. DR submitted that the assessee could not prove the transaction u/s 68 and hence, in absence of identity, genuineness an....
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.... 2005 with 5812 of 2006, (2007) 288 ITR 1 (SC). b) CIT vs. Panipat Woollen & General Mills Co. Ltd. [1976] 103 ITR 66 (SC). c) CIT vs. Walchand & Co. P. Ltd. (1967) 65 ITR 381 (SC). d) CIT vs. EKL Appliances Ltd. (2012) 345 ITR 241 (Del. HC) e) Upper India Publishing House Pvt. Ltd., 117 ITR 569 (SC). f) Motilal Laxmichand Sanghavi vs. ACIT in ITA No.3110/Mum/2018 dated 26.07.2019. g) Harparshad and Company Pvt. Ltd. vs. ACIT in ITA No.1128/Del/2017 dated 14.10.2019. The Ld. AR further submitted that without prejudice to the earlier submissions it should be considered that the Assessing Officer has complied with conditions stipulated in Section 40A(2) i.e. i) the payment in respect of which deduction has been claimed must have been made to a related party and ii) such payment must be excessive and unreasonable having regard to the market rate. 13. The Ld. DR relied upon the assessment order and order of the CIT(A). 14. We have heard both the parties and perused all the materials available on records. The expenses were recorded in the books of accounts of the assessee and were offered to tax as income as interest received by M/s. KLJ Resources Ltd. and Prayag Polymer....