TaxTMI 
TaxTMI 
2018 (12) TMI 2019
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.... final hearing of the appeal.'' 3. At the outset, it was noticed that the appeal filed by the assessee is late by 8 days. The assessee submitted that the delay occurred due to the social engagement of the authorized representative. The assessee also claimed that she does not have sufficient knowledge of income tax matters. The assessee in support of her contention filed the affidavit. Accordingly, the assessee prayed for the condonation of the delay. 4. On the other hand the Ld. DR after considering the length of delay and reasons explained by the assessee for such delay did not raise any objection if the delay is condoned. 5. We have heard the Ld. DR and perused the materials available on record. From the preceding discussion, we note that the delay in filing the appeal is just of 8 days which was suitably explained by the assessee in her affidavit. Therefore, we are inclined to condone the delay and accordingly proceed to adjudicate the issue on merit. 5.1 At the outset, it was noticed that neither anybody appeared from the side of the assessee nor any adjournment petition was filed. But we find that the assessee has filed written submissions which are placed on recor....
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....(A) erred in law and on facts in passing the order under section 143(3) of the Income tax act, 1961 which is requested to be quashed. 2. The learned AO & CIT(A) erred in law and on facts during the assessment proceeding as under. Whether act of learned AO erred in law and on facts in disallowance of expenses for the want of ledger & documentary evidence, but your honour appellant has produced as much as details & documents asked by the A.O. even though A.O has disallowed expenses on the assumption basis & percentage basis were untenable & unjustifiable. So act of disallowance of expenses amt to Rs. 888690/- by the A.O & CIT(A) has been untenable & unjustifiable. All the expenses disallowed are fully vouched. This is not the case of Id. AO that the bogus expenses have been claimed or the claim is without incurring the expenses. The only reason given by the Id. AO for disallowing the expenses is that these expenses are not required to be incurred by the appellant for its business. What expenses are to be incurred is the decision of the appellant and the Assessing Officer cannot question the wisdom of the appellant in this regard. While scrutiny pro....
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....motive in incurring the expenditure. As long as the expenditure is incurred to benefit or facilitate the business the same qualifies for deduction. In applying the test of commercial expediency for determining whether the expenditure was wholly and exclusively laid out for the purpose of the business, reasonableness of the expenditure has to be judged from the point of view of the businessman and not of the Revenue. Appellant also rely on the following: (i) COMMISSIONER OF INCOME TAX vs. S.S.P. (P) LTD. HIGH COURT OF PUNJAB & HARYANA Adarsh Kumar Goel, Actg. C.J. & Ajay Kumar Mittal, J. IT Appeal No. 535 of 2010 20 July, 2011 (2011) 202 TAXMAN 386 (P&H) Legislation referred to Section 37(1), Case pertains to Asst. Year 2005-06 . Decision in favour of Assessee telephone and vehicle running and maintenance- Assessee having produced audited books of account alongwith vouchers, AO was not justified in making ad hoc disallowance of site expenses, telephone expenses and vehicle running and maintenance expenses without showing that the same were not incurred for purposes of business (Paras 11 & 12) Conclusion : Assess....
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.... expenses on agriculture. The AO did not bring any material on record to substantiate that the expenses claimed by the assessee against business activity were not genuine or those were not incurred for the business necessity. (Para-8 & 9) . After considering this common contention of both the parties that facts of the case in this year are similar to the facts involved in- the preceding year, we hold that our finding given in former part of this order relating to ITA No.734/JP/2011 for the assessment year 2001-02 shall apply mutatis mutandis for the appeal relating to assessment year 2002-03 in ITA 735/JP/2011. In that view of the matter, the penalty levied by the AO and confirmed by the Id. CIT(A) is deleted." (Para -12) In the result, the appeals of the assessee are allowed. (iv) Precision Pipes And Profiles Co. ... vs Department Of Income Tax on 12 October, 2012 ITA No.4257 & 4258/D/2012 Asstt. Year: 2006-07 & 2008-09 DELHI BENCH T1 NEW DELHI In view of above, at the outset both the parties admitted that there was no disallowance by the Assessing Officer related to motor car, advertisement and sales promotion expenses in the earlier assessment....
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....BHAI PATEL the appellant, do hereby declare that what is stated above is true to the best of my information and belief. Place : Ahmedabad ................ Date: 16.08.2017 Signature Jigisha Sujalbhai Patel (Authorised person) 9. On the other hand the Ld. DR contended that it was the duty of the assessee to furnish the necessary details in support of the expenses claimed in its profit and loss account. But the assessee despite several opportunities failed to furnish the same before the AO as well as before the Ld. CIT(A). Therefore, it was not possible to establish the genuineness of the expenses. Thus the expenses were disallowed on an ad-hoc basis by the AO which was subsequently confirmed by the Ld. CIT(A). The Ld. DR vehemently supported the order of authorities below. 10. We have heard the ld. DR and perused the materials available on record as well as written submission filed by the assessee. In the instant case, the AO has made ad-hoc disallowances of the expenses claimed in the profit and loss account by the assessee on the ground that the assessee failed to file the supporting evidence. The Ld. CIT(A) subsequently confirmed the view of the AO. 10.1 Now ....
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.... assessee failed to furnish the supporting evidence, the ad-hoc disallowance must be made on a scientific basis. The rate of ad-hoc disallowance cannot be decided arbitrarily as held by this tribunal in case of Mahendra oil cake industries Pvt Ltd. vs. Asst. CIT reported in 55 TTJ 711 wherein it was held as under: "In our opinion, the aforesaid reasoning and conclusions of the authorities below are not tenable in the eyes of law, as no specific item or instance of personal expenditure has been noted. Both the authorities below have gone on conjectures and surmises and the disallowance is made on probabilities. Moreover, the authorities below have also not pointed out any violation of rule 6D of the Income- tax Rules, 1962. In this view of the matter, we are in agreement with the submission of the learned counsel for the assessee that there was no justification in making such ad hoc disallowance to the extent of 1/4th of the total tour expenditure without any basis. We, therefore, direct the ITO to delete the entire disallowance." 10.4 Further, we also find support and guidance from the order of ITAT Lucknow bench in case of Asst. CIT vs. M/s Vijay Infrastructure Limited....