AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (6) TMI 484
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....s leave to add, alter, and amend modify, substitute, delete, and/pr rescind all or any of the grounds of appeal on or before the final hearing. 3. The fact as culled out from the records is that the assessee is a partnership firm duly assessed to tax. The return of income has been filed on the total income of Rs. 14,71,500/- electronically on 25.09.2010. The return of income was processed u/s. 143(1) of the Income Tax Act, 1961 [ here in after referred to as Act ] by CPC Bangalore. Against tax liability of Rs. 4,54,694/-, tds amounting to Rs. 8,56,975/- has been made vide return of income and accordingly refund of Rs. 4,02,280/- has been claimed. Subsequently, the case was selected under scrutiny through CASS for " Examine various Aspect of Contractors business." The AR produced books of accounts, bills, vouchers, bank statements for verification of book results shown in the financial statements. Vide Order sheet entry dated 29.01.2013 the assessee was asked to explain as to why the interest payment of Rs. 1,72,973/- made to SREI Equipments Private Limited and Magma Finance be not disallowed under section 40(i)(ia) as not TDS has been made. In the assessment order the assessing of....
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.... CBDT and in the view of sub-section(i) of Section 190 of I.T. Act, I hold that AO has rightly disallowed the finance charges for failure of deduction of tax at source u/s 194A of I.T. Act and added to the income of the assessee. The ground of appeal raised by the assessee was dismissed. As regards the lump sum addition ld. CIT(A)'s finding is as under : 4.2 Decision - I have considered the rival submission. There is no doubt that AO has resorted for adhoc disallowances and I had also gone through the case laws cited by the Ld. AR in case of Monark Foods Pvt. Limited Vs. ACIT 54 TTJ 405; Raj Enterprises Vs. ITO 51 TTJ 408 and Shashi Singhania, Raipur Vs. ITO-1(1), Raipur by Hon'ble Nagpur Bench of ITAT dated 19/01/2006. So far as Rs. 25,000/- is concerned. AO appears to be reasonable, hence Rs. 25,000/- is confirmed. The assessee has debited labour payment to the extent of Rs. 42,83,160/- and he had found that these are supported by handmade vouchers and paid by cash, thus no open for verification. Looking to the quantum disallowed viz-a-viz claimed by the assessee in contract A/c., I am of considered opinion after perusal of all case laws find the AO very reasonable in disallowa....
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....inst the appellate order passed by ld. CIT(A) Bilaspur. 4. Your honour, the assessee requests to accord kind permission for production of an additional evidence as it go to the very root of the matter and involved a substantial cause in determining the correct income and the correct tax liability of the assessee for the year under appeal. 5. Your honour, the assessee may kindly be accorded permission to adduce certificate from accountant in respect of finance charges credited by recipient Non Banking Finance Company in its books of account in Form No. 26A, which is enclosed herewith for your kind consideration. 6. Your honour, since the assessee was prevented by sufficient cause from producing this evidence before the ld. AO and before the first appellate authority because the NBFC's has not issued certificate within time because the assessee has defaulted in payment of EMI during financial year 2015-16 due to financial problem. In the light of given facts and circumstances of case, your honour is requested kindly admit the above-mentioned additional evidence in the interest of principal of natural justice and oblige." 6. Since, the assessee has moved an application under ....
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.... the Income Tax Act, 1961 for certifying the furnishing of return of income, are differing. Even based on this difference of the amount disallowed and the amount for which the assessee submitted a CA certificate in support for allowability of the interest needs verification at the end of the assessing officer. Thus, ld. Assessing Officer is directed to pass a speaking order in accordance with law after giving proper opportunity to the assessee as per the evidence placed on record within a reasonable time and allow the interest to that extent of evidence placed on record and the amount of interest claimed. Therefore, the ground no. 1 raised by the assessee is allowed. 10. As regard the Ground no. 2 raised by the assessee, the ld AR of the assessee submitted as under : "2. Your honour, in this ground it is raised that the Ld. CIT(A) has erred in confirming an addition of Rs. 75,000/- on account of Office Expenses, Staff Welfare and Vehicle Expenses on presumptive basis. 2.1 Your honour, the assessee has maintained proper books of account on the basis mercantile system of book keeping which is duly approved as per provision of I.T Act 1961. The books of account of the assessee ar....
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.... Raj Enterprises v. ITO (1995) 51 TTJ (Jaipur) 408. 2.3 Your honour, when books were not rejected and when the income was not estimated and when the income returned was accepted as correct, without disturbing the same, it is not understood as to how in a scrutiny assessment such Adhoc disallowances were permissible particularly when no evidence whatsoever was brought on record against the assessee to justify such Adhoc disallowances. Since the income returned on the basis Audit Books was accepted as correct, it is implied that the correctness and genuineness of the expenses claimed in the accounts, which were subjected to Audit, stood undisputedly accepted. The Auditors who conducted Statutory Audit had not adversely commented regarding the incomings/outgoings. Such Adhoc disallowances are also unsustainable in view of the decision of the Jurisdictional Bench of the Hon'ble ITAT, Nagpur Bench (Camp at Raipur) in its order in ITA No. 240/NAG/05 dt. 19.01.06 in Sashi Singhania, Raipur vs. ITO 1(1), Raipur wherein while dealing with the adhoc disallowance out of material purchased and out of earth transporting charges, held that since the expenses under these heads were incurred....