TaxTMI 
TaxTMI 
2021 (6) TMI 570
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...."1. The C.I.T.(Appeals) erred in law and on facts in confirming the action of assessing of addition of Rs. 4,20,000/- to the returned income of the appellant under the head 'Income from House Property' by estimating notional rent of Rs. 6,00,000/- in respect of property situated at Mumbai without appreciating the facts of the properly. 2. The C.I.T(Appeals) erred in law and on facts in sustaining adhoc disallowance of cash expenditure to the extent of 10% i.e. Rs. 5,07,680/- out of total expenditure of Rs. 50,76,800/- without appreciating the fact that net profit ratio of the appellant is improved in the year under consideration. 3. The C.I.T(Appeals) erred in law and on facts in confirming the disallowance of Rs.....
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....ther disallowed the depreciation of three cars owned by assessee by taking view that the vehicles were used for personal use. On appeal before the ld.CIT(A) the addition of Rs. 420,000/- under the head 'income from house property' and disallowance on depreciation on cars was upheld. However, the addition on account of cash expenses was restricted to 10%. Further aggrieved, the assessee has filed present appeal before this Tribunal. 4. We have heard the ld. Authorised Representative (AR) for the assessee and the ld. Senior Departmental Representative (Sr. DR) for the Revenue and perused the order of the lower authorities carefully. Ground No.1 relates to addition of Rs. 4,20,000/- on account of 'income from house property' being notional ....
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....r ld. Dr prayed for upholding the action of the AO. 6. We have considered the rival submission of the parties and have gone through the orders of authorities below. The AO made addition under section 23 (a) by taking view that assessee has two residential house, one at Surat and another at Mumbai. The assessee has not offered any income under the head 'income from house property' for taxation, in respect of residential property in Mumbai. The assessee is residing in Surat and carrying its business activities from Surat. In response to the show cause notice, before the AO, the assessee stated that he is frequently visiting Mumbai and used this house for staying at Mumbai, thus the property is used for business purpose for staying at Mumba....
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.... in the said case the house property was in the shape of Go-down. Go-down can only be used for business purpose. On the contrary the house property in the present case is a residential property situated in residential area. Thus, the case law relied by ld AR for the assessee is not helpful to the assessee. Hence, we affirms the order passed by ld. CIT(A). In the result, Ground No.1 of the appeal is dismissed. 7. Ground No.2 relates to sustaining adhoc disallowance of cash expenditure to the extent of 10%. The ld.AR of the assessee submits that during the assessment, the AO made disallowance @20% of the total expenses made in cash. The ld. CIT(A) restricted the disallowance to 10%. The ld.AR submits that 10% disallowance of expenses is....
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....ry of totaling to Rs. 50,76,800/-. All the payments were made in cash. Complete details of payments and proof of payment of expenses, has not been furnished except name and salary register. No other details like address, identity or other details were furnished. The mAO was of the view that in absence of complete details, he is unable to verify the veracity of expenses. Therefore, issued show cause notice on the 20% expenses should not be disallowed being unverifiable. The assessee in response to the show cause notice stated that workers are not permanent employees of the unit and as per the practice in the diamond trade the workers may not work with the industry for more than a week or a month or a year and so it is not practical to mainta....
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....ively available for the use of office staff for cash withdrawal from bank and movement of diamonds from subcontractors within the city for business purpose. The second car is used by assessee for own use of business for meeting and travel from home to office and factory within the city. The third car is used by owner for business purpose to travel from Surat to Mumbai frequently. The ld.AR submits that all three vehicles are used for business purpose. 11. On the other hand, the ld.Sr.DR for the Revenue supported the order of lower authorities. The ld. Sr. DR for the revenue submits that assessee is not maintaining any log book or furnished any corroborative evidence that all three vehicles are used for bossiness purpose. It was submit....