TaxTMI 
TaxTMI 
2022 (5) TMI 930
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....128/-. 1. (ii) Disallowance of 25% of freight inward expenses of Rs.48,62,129/-. 1.(iii) Disallowance of 25% of freight outward expenses of Rs.20,69,876/- 1.(iv) Disallowance of 25% of loading and unloading expenses of Rs.8,77,735/-. 1.(v) Disallowance of 25% of stores and spares expenses of Rs.25,67,185/-. 1.(vi) Disallowance of testing charges of Rs.12,74,532/-. 1.(vii) Disallowance of bank commission and bank guarantee expenses of Rs.2,00,000/- 1.(viii) Disallowance of 25% of packing expenses of Rs.2,67,092/-. 1.(ix) Disallowance of Rs.3,58,636/- out of brokerage expenses. 1.(x) Disallowance of depreciation of Rs.47,70,928/-. 2. The Ld.CIT(A) has erred in law and on facts in admitting the additional evidences in violation of conditions specified in Rule 46A without appreciating the fact that during the course of assessment proceeding ample opportunities were given the Assessing Officer to produce the evidences and even during remand proceedings, the A.O. did not find the additional evidences submitted by the assessee as convincing and conclusive. 3. The appellant craves leave to am....
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....of bills are enclosed. 7. Details of Brokerage alongwith bills are enclosed. 8. Details of Professional fees & Consultation expense alongwith name & address of parties. Copy of bills are enclosed. 10.Details of Testing charges alongiwth bills are enclosed. 11. Details of Bank commission are enclosed. 12. Details of Excise expenses are enclosed. 13. Details of Inspection Fee alongwith bills are enclosed. 14. Export commission of Rs.2,77,961/- paid to I.T.C.Ltd., 207/215, High Street, Orpington, Kent BRS OPF. 15. Details of Other expenses alongwith R.T.O. expenses are enclosed. 3. Reply of Para (d) of your letter Copy of bills for addition to fixed assets for current Asst.Year 2008- 09 are enclosed marked Annexure-S" 5.1 However, the AO was not satisfied with the submission of the assessee on the reasoning that the assessee has not furnished adequate details for the necessary verification. As such, the details furnished by the assessee were containing the copies of the ledgers along with the name of parties. But there was no detail about the amount which were paid to the different parties. ....
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....or bank statement or any other supporting documents. Therefore, the AO held that the impugned expenses cannot be accepted in totality without cross verification. Thus, the AO disallowed part expenses of Rs. 2,00,000/- and added the same to total income of the assessee. Brokerage Expenses 5.6 The assessee in the year under consideration claimed the brokerage expense of Rs. 4,48,168/- only. The AO from the note to accounts attached with the financial statement found that an amount of Rs. 3,28,797/- is prior period expenses, thus he disallowed the same. Similarly, the AO found that the genuineness of remaining expense of Rs. 1,19,376/- was also not proven as the assessee failed to furnished necessary document and evidences. Thus the AO disallowed 25% of the remaining amount i.e. 29,844/- only aggregating to Rs. 3,58,636/- and added the same to the total income of the assessee. Depreciation 5.7 The AO found that the assessee during the year has made an addition of Rs. 2,53,35,712/- to the fixed assets and claimed depreciation and additional depreciation of Rs. 24,04,744/- and Rs. 23,66,184/- respectively. However, the assessee failed to submit necessary document to prove th....
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....rt of the AO admitted the additional evidences and proceeded to decide individual additions made by the AO of various expenses. The finding of the learned CIT(A) is given in the following paragraph. Labour charges, freight inward expenses, freight outward expenses, loading unloading expenses, stores and spares and packing material. 7.1 The CIT(A) observed that the assessee has furnished the necessary bills and genuineness of the payments and duly recorded the expenses in the books of accounts. Thus, the learned CIT(A) held that in such circumstances, the ad-hoc disallowances of the expenses are not tenable and directed the AO to delete the same. Testing Charges 7.2 The learned CIT(A) observed that the AO has disallowed testing charges on account non availability of supporting document. However, during appellate proceeding, the assessee has furnished relevant ledger and supporting document establishing correctness of the expenses. Hence, the ld. CIT-A directed the AO to delete the addition made by him. Bank Commission and Guarantee expenses: 7.3 The learned CIT (A) held that the assessee has submitted bank details during assessment proceeding as well as during appe....
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....submitted that the majority of bills for the purchase of the fixed assets were filed which are placed on pages 536 to 651 and 673 to 674 of the paper book. 8.7 Both the learned DR and the AR before us vehemently supported the order of the authorities below as favourable to them. 9. We have heard the contentions of both the parties and perused the materials available on record. From the preceding discussion, we note that it was alleged by the AO that the assessee has not furnished the requisite details in support of various expenses. Thus, the AO, in the absence of such details, has made the disallowance of various expenses on ad hoc basis. The list of such expenses reads as under: i. Labour charges, ii. Freight inward expenses, iii. Freight outward expenses, iv. Loading and unloading expenses, v. Stores and spares expenses, vi. Packing material expenses. 9.1 However, the learned CIT (A) was pleased to delete the addition made by the AO on the reasoning that the assessee has furnished all the requisite details in support of the expenses. 9.2 Admittedly, the necessary details in support of the expenses were filed by th....
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....se ledgers contains the details of the mode of payment which is through banking channel. Similarly, the assessee has also filed the copy of the bank statement which is placed on pages 251 to 438 of the paper book. Likewise there were addresses furnished by the assessee of all the parties to whom the payment was made against the expenses. However, the AO has not verified from any of the party despite having the power under the statute under the provisions of section 131(1)/133(6) of the Act. 9.7 The 2nd allegation of the AO was that the assessee has not furnished the details of the TDS. However on perusal of the paper book filed by the assessee, particularly pages 693 to 724, we note that the assessee has furnished details of TDS deducted and the copies of the TDS return acknowledgment. 9.8 The 3rd and the 4th allegation of the AO was that the assessee has not furnished the bills of the parties as well as the copies of the vouchers for payment. Indeed, it was the onus of the assessee to furnish the requisite details as desired by the AO. On perusal of the paper book, we also note that such details were not furnished by the assessee. However, in our considered view in the absen....
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....ile filing the remand report to the learned CIT (A). 9.12 Coming to the disallowance of testing charges of Rs. 12,74,532.00, in this connection we note that the assessee has filed the necessary details of such expenses. The details include the ledger copies of the parties and the major bills issued by the parties which are placed on pages 207 to 249 of the paper book. The AO has not pointed out any defect in the details furnished by the assessee. In the event, the AO had any doubt on the genuineness of such expenses, he was empowered under section 133 (6)/131 of the Act to carry out the necessary verification. But he has not done so. 9.13 Coming to the ad hoc disallowance of Rs. 2 lacs towards bank commission/bank guarantee expenses, in this regard we note that the assessee has furnished the copies of the ledger of such expenses which is placed on pages 439 to 478 of the paper book. The assessee in support of its expenses has also filed the bank statements which are placed on pages 251 to 438 of the paper book. The details of such expenses were very much available during the remand proceedings before the AO. Therefore the same cannot be disallowed on adhoc basis. 9.14 Comi....
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....ity of the assessee or the tax that the Department is likely to collect from him whether in one year or the other." 9.15 As regards the genuineness of the expenses incurred by the assessee in the under consideration, we note that all the necessary details along with the bills were filed by the assessee which are placed on pages-515 to 533 of the paper book along with the copy of the ledger. But the AO has not doubted on the genuineness of such details filed by the assessee. Thus we are of the view that the impugned expenses incurred by the assessee were genuine. However, the same cannot be allowed in the under consideration for the reason that the assessee failed to deduct the TDS in the year under consideration. 9.16 Coming to the disallowance of depreciation of Rs. 47,70,098/-, in this regard we note that the assessee has furnished the details of the bills of the major assets which are placed on pages 536 to 651 and 673 to 674 of the paper book. However, no defect of whatsoever has been pointed out by the AO in these details. Accordingly we are of the view that there cannot be any disallowance of depreciation as alleged by the AO. 9.17 The learned DR at the time of heari....