TaxTMI 
TaxTMI 
2021 (4) TMI 249
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....ings of the ld. CIT(A) which are under challenge before us read as under:- "Ground No. 3: In the profit & loss account, diwali expenses of Rs. 38,282/ - has been debited. On examination, it is noticed that these expenses are not properly vouched or are supported by self-made vouchers only. Further, these expenses were met by cash payments. Therefore, these expenses are not subject to verification. Therefore, the assessee was asked vide order sheet entry dated 06.09.2016 to show cause as to why necessary disallowance may not be made out the claim so made. The assessee has not submitted anything specific in this regard. As stated above, the expenses claimed by the assessee are not subject to verification for want of....
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.... to Rs. 4,990/-, is disallowed to cover up any leakage of Revenue on this account. As regards the Ground no 4 related to disallowance made from General cartage expenses, I have gone through assessee's submission and AO's findings. Looking to the nature of these expenses, some disallowance for nonbusiness & unverified portion in the total claim was justified. The disallowance has already been restricted to 5% of the total claim by the A.0 and is found reasonable and justified. No interference is called for in the same This ground of appeal is treated as dismissed. Ground No. 5: In the profit & loss account, the assessee debited material shifting expenses of Rs. 11,93,547/ -. On examination....
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....s are not properly vouched or are supported by self-made vouchers only. Further, these expenses were met by cash payments. Therefore, these expenses are not subject to verification. Therefore, the assessee was asked vide order sheet entry dated 06.09.2016 to show cause as to why necessary disallowance may not be made out the claim so made. The assessee has not submitted anything specific in this regard. As stated above, the expenses claimed by the assessee are not subject to verification for want of proper vouchers and due to cash payments. Therefore, it is considered to disallow 5% of the expenses of Rs. 42,776/- , which comes to Rs. 2,139/ -, is disallowed to cover up any leakage of Revenue on this account. As r....
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.... Considering the nature of the expenses, quantum of the disallowance made and the reasons given by the AO, the disallowance is being restricted on a more reasonable basis to Rs. 50,000/- to take care of any pilferage due to cash and non business related expenses. The balance disallowance is to be deleted. This ground of appeal is treated as partly allowed." 3. During the course of hearing, the ld. AR submitted that the assessee is engaged in the business of processing & exports of stones. During the year under consideration, it has reported a total turnover of Rs. 25,10,35,845/- disclosing gross profit of Rs. 9,46,15,152/- thereby reporting gross profit of 37.69% which is amongst the highest top three in the industry. It was sub....
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....,946/- has been disallowed by the Assessing Officer. It was accordingly submitted that merely because the expenditure has been incurred in cash, so long as the same has been incurred for the purposes of business and is duly supported by vouchers and entries in the books of accounts, the same cannot be disallowed. Further, it was submitted that no specific expenditure has been highlighted by the Assessing Officer which has not been incurred for the purposes of the business. It was accordingly submitted that the disallowance so made by the Assessing Officer are clearly ad-hoc in nature and the same may be directed to be deleted. 4. Per contra, the ld. DR relied on the findings of the Assessing Officer and it was submitted that the expenses....
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....are subject matter of dispute before us, though, the finding of the Assessing Officer are more or less similar as in the case of disallowances of loading and unloading expenses, however, the ld. CIT(A) has sustained the same holding that on the facts involved and the nature of expenses as well as the proportion in which the disallowance is made to the total claim made, the disallowance is found to be reasonable & justified. We, therefore, find that there are inconsistencies in the findings of the ld. CIT(A), where at first place, he has held that the Assessing Officer has not able to bring any example of specific disallowable expenses in case of loading and unloading expenses and under the similar facts pattern where the disallowances have ....