TaxTMI 
TaxTMI 
2020 (2) TMI 1723
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.... deleting the addition made by AO of Rs. 21,13,44,015/- by observing that the property comes in category type-1 i.e. for agricultural / residential not for commercial type-3. 2. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 89,75,917/- (out of Rs. 95,75,917/-) made by the AO on Packing expenses. These expenses were incurred in cash and also violating the provision of Section 40(a)(ia) of the Act. 3. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 9,66,284/- (out of Rs. 10,66,284) made by the AO on loading and unloading, cartage outward etc. These expenses were incurred in cash without any documentary evidence. 4. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 3. The grounds raised in Assessee's Cross Objection No. 7/Del/2016 (AY 2011-12) read as under:- 1. That on the facts and in the circumstances of the case and the legal position, the Ld. CIT(A) has erred in holding that the provisions of section 50C are applicable in the case of appellant firm when a) the property falls in 'extended l....
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....passed by the AO and the reiterated the contention raised in the grounds of appeal of the Revenue and requested that appeal of the Revenue may be allowed. 7. On the contrary, Ld. Counsel for the assessee relied upon the order of the Ld. CIT(A) and stated that Ld. CIT(A) has passed a well reasoned order on the basis of the facts and circumstances of the case and in accordance with provisions of law. Therefore, the appeal filed by the Revenue may be dismissed. In support of his contention, he filed a Paper Book containing pages 1-70, to substantiate its case and also filed the copy of brief synopsis. 8. We have heard both the parties especially the orders of the authorities below alongwith the paper book as well as Brief Synopsis filed by the Ld. Counsel for the Assessee. We have gone through the impugned order of the Ld. CIT(A) and found that Ld. CIT(A) has elaborately discussed the issues in dispute and decided the same from page no. 18 to 31 of the impugned order, which are reproduced as under:- "4.00 Findings & Decisions:- The appellant introduced certain evidence during appellate proceedings. The same was forwarded to the AO for his comments. The AO considered the additio....
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....category. It was claimed by the appellant that if it was a case of printing error then why Shamaypur village and Samaypur village would be shown separately at two places on the same website. The appellant in this regard also filed a letter dtd. 23.05.2015 to MCO on 26.05.2015 for clarifying this issue as well as some more issues arising out of letter dtd. 21.05.2015 issued by NOMC, but it did not meet with success. 4.04 The above conflict was carefully studied by me. Basically the quarrel between the AO and the appellant was over the treatment of the "Lal Dora land" in question. According to the AO, it was in 'G' category while as per the appellant it was in 'H' category. The matter was examined by me. I have no hesitation in - siding with the AO that the land in question fell in 'G' category. The "stamp law in Delhi" authored by Shri K.K.Gupta clearly depicted the land of the appellant in 'G' category. That being so, the contention of the appellant that the land in question fell in 'H' category is held by me to be incorrect. As far as the application of the multiplicative factor is concerned, the AO applied the multiplicative factor of....
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.... category "F" instead of category "G" as applied in the Asstt. Order. This issue of category has been dealt with in detail above holding that category "G" is attracted in the instant case. The AO in RR also proposed that STCG should be charged on sale of building portion on the ground that the depreciation was claimed, which brought into play Sec 50. The appellant filed the copy of depreciation chart claiming that no depreciation was charged on the building ever in the past. This fact was apparent from the depreciation chart also. Since, the depreciation was not charged, therefore, STCG on sale of building portion was not legal. In result the prayer of AO for enhancement stands rejected. 4.06 The AO in RR has also suggested that the appropriate amount should be disallowed u/s. 14 A also. The appellant submitted per contra that this proposition was mis-conceived as the issued taken up by AO was not in appeal. On merits, it was submitted that vide Asstt. order sheet entry dtd. 16.09.2013, the AO raised the issue of disallowance u/s. 14 A which was addressed wide letter dtd. 13.01.2014. Copy of the order sheet was filed at Pg. No. 32 and reply dtd. l3.01.2014 to AO has been fi....
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....ces (C & F Agent), therefore, the claim is not sustainable. All the findings of the AO are un-sustainable in law as well as on facts for the following submissions. A. The AO could not understood the nature of these expenses. He mis-understood these expenses as "payment to contractors" "sub - contractors". The nature of these expenses is explained now. The assessee sells electrical goods in whole sale. For sale, the material needs to be packed. The packing material consists of wooden boxes, tin patti to tie up the wooden boxes from 4 sides and grass 1 soft material to be put inside the wooden boxes to save the material from being damaged during transportation. In the market, where the assessee operates, the sellers of these wooden material are available plentiful of all the times. They sell this packing material to the assessee as well as to other clients. These are very petty, un-organised stray persons without any establishments who keep on moving in the market for search of needed persons of such packing material. At times, as a courtesy and on request, they help in packing the sales material if the packing material is buyout from them. No separate packing charges are charg....
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....voucher acknowledging the sale and receipt of payment as per the voucher. This practice is throughout prevalent in the electrical market including Bhagirath place which is the biggest electrical market of ASIA and the main working place of assessee also. These persons also do not maintain any bank account. These persons work only against cash receipts and do not sell against any cheque payment. Copies of few sample such vouchers are already attached in the paper book. These are the only payment evidences which can be held by any assessee for such type of purchases. The similar practice and the similar vouchers has been there in the past and have always been accepted. In this regard,it is further submitted that there is no dispute that the vouchers exist for all such payments. It is also not out of place to mention that such cash payments are not prohibited under the I. T. Act., including Sec. 40 A (3). It is further submitted that if the payment is not made in cash and insisted upon for cheque payment and further insisted upon for printed bills of such packing material sellers, then it was not possible to get the packing material and consequently no sale could had been effected....
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....1,06,62,842/- - The AO disallowed on ad - hoc basis 10% for the twin reasons. One that bills and vouchers have not been submitted. Two, the assessee is C & F agent of electrical goods manufactured by Havell;s. So The findings and the basis are un - sustainable for the following submissions. A. The findings that bills and vouchers have not been submitted is not correct. The assessee maintains all bills and vouchers. The same can be produced before your goodself also, if desired. The accounts are audited with a clean report. There is no qualification in audit report regarding non - maintenance and non - productions of vouchers during audit. The assessee is run only by the staff. In that situation, it is not possible to incur and book any such expenses which is not supported by voucher / evidence. Hence. the disallowance on the ground of non - submission of bills and vouchers is un - sustainable. B. The expenses are comparative to earlier year as under :- A. Y. 2010 - 2011 A.Y.2011 - 2012 Loading and unloading expense 34,14,448/- 40,53,036/- - Cartage outward 48,69,274/- 56,26,049/- General expenses 1,75,268/- 1,71,431/- Staff welfare 2,47,401/- &nb....
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....mal escalation in cost from last year, cartage depends upon the no. of times the cartage event took place, staff welfare depends on no. of persons and loading and unloading cost also depends upon the no. of times the loading and unloading had to be done at the time of receipt and dispatch of goods etc. etc. Thus, the normal variation cannot be viewed adversely. No expenses under these heads have been disallowed ever in the past. F. That further there is no basis for 10% disallowance. Any disallowance without any basis is not sustainable in law. The fact cannot be disputed' that the payments in cash invariably give rise to scopes for inflation of expenditure and that there was inflation of the expenditure in the case in question was not forcefully denied by the appellant during the appellate proceedings also. Therefore I am of the considered view that the entire cash expenses in relation to the above items were not fully supported by materials having evidentiary appellant did not have supporting evidence of each and every item mentioned in the bills and vouchers. Such being the reason the addition of Rs. One Lac/Rs. 1.00 lacs is sustained out of the above addition." 5.1 Aft....