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2021 (1) TMI 200 - ITAT AHMEDABADDisallowance of rent expenses - Not been established by assessee that the premise used for business purpose - assessee explained that due to expansion of the business operation of the company it had taken the premise on rent to carry out business and holding meetings with brokers/parties as staying in the hotel was costly and more expensive - HELD THAT:- Looking to the revenue from operation of the assessee company to the amount of ₹ 1,33,38,36,680/- for assessment year 2012-13, the impugned expenses of ₹ 8,80,000/- was only 0.05% of the total revenue from operation and there was increased in the revenue from operation from ₹ 1,33,38,36,680/- for assessment year 2012-13 to ₹ 1,76,28,64,861/- for assessment year 2013-14 which demonstrate expansion in the business operation of the assessee company. It is also undisputed fact that similar rent expenses were incurred by the assessee in respect of same property in subsequent year 2014-15 and 2015-16 and the Assessing Officer had allowed the same while framing scrutiny assessment year u/s. 143(3) of the Act. In the light of the above facts and circumstances, we consider that the action of Assessing Officer in disallowing the rent expenses in the year under consideration is not justified - Decided in favour of assessee. Disallowance u/s. 69C - assessee had purchased cutting machine but no freight has been accounted - assessee explained that it had obtained the delivery of the said machine in its own tempo, therefore, no separate expenditure towards freight was accounted - HELD THAT:- It is observed that Assessing Officer has not brought any evidence before invoking section 69C of the act that assessee has incurred any unexplained expenditure - revenue authorities have not brought any evidence on record to show that the assessee has actually incurred any expenditure and the entire addition has been made on presumption basis. We consider that such addition on presumption basis is not justified, therefore, we direct the Assessing Officer to delete the impugned addition. Accordingly, this ground of appeal of the assessee is allowed.
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