TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 1085
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....ter referred to as 'the Act') dated 14.12.2018. The assessee has raised the following grounds of appeal:- "1. That on facts and circumstances of the case and in law, the learned CIT(A) has erred in arithmetically sustaining the addition of Rs.1,80,125/- @ 50% out of total addition of Rs.3,60,250/- made by the learned AO towards purchase of cloth from Milan Lace on the ground that the same is bogus purchases merely because the invoice number and the date of invoice were moving in reverse chronology. The learned CIT(A) has sustained 50% of the disallowance on the ground that though the payment has been made through banking channel, which is a good evidence in support of the appellant but the appellant has not been able to explain satisfacto....
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....ephone, no signature of seller. Accordingly, the purchases expenses of Rs.3,60,250/-, that is entire purchase was disallowed. 3. The Assessing Officer further noted that assessee has debited expenses of Rs.2,06,400/- on account of construction/ repair. On verification of details, Assessing Officer found that assessee furnished bills for purchase of cement. On show cause notice, assessee submitted that they have purchased cement for renovation of staff room, toilet and some minor renovation. No purchase bills for materials required for renovation of construction work as it was executed by contarctor. The Assessing Officer was further viewed that expenses incurred by assessee as capital expenditure and was to be added to the capital asset. T....
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....anaged the other material. The Assessing Officer disallowed on the ground that assessee could not produce the bills. In alternative, Assessing Officer treated the same as capital expenditure instead of revenue expenditure. The assessee further submitted that they have not only purchased cement but made payment of renovation work through account payee cheque and account confirmation was furnished. The Ld. CIT(A) after considering the submission of assessee noted that Assessing Officer disallowed expense of Rs.2,06,400/- but assessee furnished invoice of purchase of cement of Rs.94,943/- and Rs.1,11,458/-. The assessee also furnished the bank statement showing payment through account payee cheque. The Ld. CIT(A) noted that no debit balance is....
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....e disallowance of purchase is sustained, the gross profit margin would be around 150% as comparative of earlier years. As because there is some clerical mistake in preparing invoice, no disallowance should be made. 8. On the other hand, Ld. Sr. DR for the Revenue supported the order of lower authorities. Ld. Sr. DR submits that Ld. CIT(A) has already granted substantial relief to the fact that assessee failed to substantiate the genuineness of purchase. 9. We have considered the submission in written submission filed by assessee and submission made by Ld. Sr. DR for the Revenue. We find that the Assessing Officer made disallowance of entire purchase shown from Milan Lace on the ground that date of voucher and their dates are not matching ....
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....he purchase and payment made through account payee cheque. The assessee further stated that not only purchase made by account payee cheque even the payment to contractor is also made through account payee cheque. Merely, Ld CIT(A) could not find the payment in bank statement, disallowance is not sustainable. On the alternative disallowance by treating as capital expenditure, the assessee stated that the expenditure was made on small modification to changing room for the workers, toilet repair and replacement of broken flooring in the factory shed which are not in the nature of capital expenditure. 11. On the other hand, Ld. Sr.DR for the Revenue supported the order of Assessing Officer. 12. We have considered the written submission filed ....