TaxTMI 
TaxTMI 
2020 (2) TMI 942
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....e in both the years relate to ad hoc addition on account of service charges receipts and ad hoc disallowance of vehicle and telephone expenses on estimated basis without giving any reasonable justification for the same. 3. Rival contentions have been heard and record perused. Facts in brief are that the assessee is engaged in the business of motor and spare parts. During the A.Y. 2012-13, the A.O. has made addition of Rs. 6.00 lacs on account of service receipts. The A.O. observed that out of total service receipts of Rs. 10,69,715/-, the assessee has claimed free service charges amounting to Rs. 10,29,044/-, if the amount of free service charges are excluded from the total service receipts declared than only an amount of Rs. 40,670/- re....
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....r consideration are estimated on consummative basis at Rs. 6,00,000/- and the same is added to the total income of the assessee. The A/R of the appellant made general submission but he did not argue on directly on the estimation of the service income. The CIT(A) also confirmed the addition in A.Y. 2009-10 and the appellant also accepted. Therefore considering the facts of the case and nature of business I am the view that Assessing Officer rightly estimated and made addition of Rs. 6,00,000/- in service income. Hence I confirm the addition of Rs. 6,00,000/-. This ground is not allowed." 4. Shri K.L. Moolchandani, the ld AR appearing on behalf of the assessee has contended that during the course of assessment proceedings, a detai....
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.... assessment order. As per plethora of judicial citations, no valid addition can be made in absence of the rejection of the book results u/s 145(3) of the Act. For the purpose, reliance is placed on the judgment of honorable Supreme Court in the case of M/s Sargam Cinema v CIT (2011) 197 Taxman (203). 5. It was further argued by the ld AR that the ld. authorities below had however attempted to justify such addition on the basis of the addition of Rs. 3,56,000/- allegedly made and confirmed by the AO & CIT (A) in the assessment year 2009-10. On careful study of the said appeal order it is noted that initially such addition was deleted by the ld. CIT (A) vide para 5.3 at page no.8 of the appeal order which is being reproduced hereunder for ....
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....tion of such 'findings' within the meaning of section 154 of the Act is patently incorrect and out of the purview of section 154 of the Act. (ii) Even other- wise also, no show cause what-so-over was issued to the appellant to rectify such alleged mistake. Thus, the rectification order so passed u/s 154 of the Act was not legally maintainable. Despite of such shortcomings in the rectification order passed u/s 154 of the Act, the appellant did not object to the validity of the order with a view to get the proceedings concluded amicably to avoid further controversy on the point. 6. On the other hand, the ld DR has relied on the orders of the authorities below. 7. I have considered the rival contentions and carefully gone through....
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....oc addition made during the years under consideration. Accordingly, the A.O. is directed to delete the addition of Rs. 6.00 lacs in the A.Y. 2012-13 and similar addition of Rs. 3.00 lacs made in the A.Y. 2013-14. 9. In the A.Y. 2012-13, the A.O. has also made ad hoc disallowance of Rs. 60,000/- on account of vehicle expenses and Rs. 8,000/- on account of telephone expenses, which was restricted by the ld. CIT(A) to the extent of Rs. 50,000/- on account of vehicle expenses and Rs. 5,000 on account of telephone expenses. I found that the disallowance has been made by the lower authorities on estimate basis and without pointing out any specific mistake or instance of disallowable nature of expenditure. Keeping in view the totality of facts ....