2024 (1) TMI 691

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....8/3/2023 arising out of the order passed u/s. 154 r.w.s. 143(3) of the Income Tax Act, 1961 [the Act] for the AY 2016-17. 2. Briefly stated the facts of the case are that the assessee is a partnership firm deriving income from trading in Rice, Dal, Oil, Sugar and other commodities on wholesale basis. The assessee filed its return of income on 25/09/2016 admitting a total income of Rs. 56,73,270/- for the AY 2016-17. The scrutiny assessment u/s. 143(3) of the Act was completed by the Ld.AO on 23/12/2018 wherein the Ld. AO disallowed certain expenses amounting to Rs. 10,91,105/- on ad-hoc basis. Thereafter, the Ld. AO by invoking the provisions of section 154 of the Act passed a rectification order u/s. 154 r.w.s 143(3) of the Act on 13/1/....

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....essee. Before us, the Ld. AR argued that the Ld. AO has made a suo motto order u/s. 154 of the Act. The Ld. AR referred to para 5.1 of the original assessment order wherein the Ld. AO has referred to the expenses incurred in cash and supported by self-made vouchers. The Ld. AO considered the expenses incurred towards freight charges Rs. 90,87,953/- and labour charges Rs. 18,23,096/- aggregating to Rs. 1,09,11,049/- and has made an ad-hoc disallowance of 10% amounting to Rs. 10,91,105/- citing that these expenses are unverifiable in nature and could not be substantiated by the assessee. The Ld. AR therefore pleaded that when the ad-hoc disallowance of 10% of the total expenses claimed by the assessee has been disallowed by the Ld. AO, which ....