2025 (7) TMI 1480

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....Tax Act, 1961[hereinafter referred to as 'the Act'] whereby the Ld. CIT(A) had partly allowed the appeal against the Assessment Order, dated 22/03/2016, passed under Section 143(3)of the Act for the Assessment Year 2013-2014. 2. The Assessee has raised following grounds of appeal : "1. That the Ld. Addl./JCIT (A)-4, Chennai has erred in confirming the 50% disallowance made by ld. AO at Rs. 5,04,975/- out of the total business expenses incurred and claimed by the appellant at Rs. 10,09,950/- in his proprietary business firm M/s Gokul Construction, erroneously treating and holding without any basis or evidence that the legtimate business expenditures as unrelated to business activity or may have been incurred for some other busine....

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....oprietorship']. In appeal, the CIT(A) confirmed the disallowance. Being aggrieved, the Assessee has not preferred the present appeal before the Tribunal on the grounds reproduced in paragraph 2 above. 4. We have heard both the sides, perused the material on record. 5. On perusal of the Assessment Order we find that the Assessing Officer has made the disallowance on the ground that no business activity was carried out by the Proprietorship as there were no purchases and sales during the relevant previous year. However, the Assessing Officer did not make disallowance of entire expenses and restricted the disallowance to INR. 5,04,975/- being 50% of total expenses of INR. 10,09,950/- citing paucity of verification and keeping in view of ....

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....ipts along with Submission, dated 08/11/2024, filed before the CIT(A) [placed at pages 33 to 64 of the paper-book]. We find that documents/details filed by the Assessee were brushed aside by the authorities below without pointing out any infirmity and without any inquiry. Further, we are of the view that the mere fact that there was no sales during the relevant previous year cannot be the sole basis of concluding that no business was carried out by the Proprietorship during the relevant previous year. We note that the Assessing Officer has itself recorded that "the opening stock and the closing stock are essentially the same properties". Thus, it is admitted position that the Assessee was holding opening and closing stock. Therefore, it can....