TMI Blog2017 (8) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appeal of the assessee is allowed. Disallowance u/s 14A - Held that:- As submitted that the assessee has not earned any exempt income during the year. The fact is also verifiable from page no. 2 and 3 of the computation of total income wherein the ld DR could not point out any exempt income. From the profit and loss account of the assessee also it is evident that assessee has not claimed any income under exemption. In view of the decision of the Hon'ble Delhi High Court in Cheminvest Ltd Vs. Cit [2015 (9) TMI 238 - DELHI HIGH COURT] wherein, it has been held that no disallowance can be made where no exemption is claimed. Therefore, in view of the above decision we direct AO to delete the disallowance u/s 14A of the Act. - Decided in favour of assessee. Disallowance of expenses as non-business purposes - Held that:- Any expenditure which is not supported by proper bills and vouchers or if it is shown that such expenditure has not been incurred wholly and exclusively for the purposes of the business then definitely such expenditure is not allowable u/s 37(1) but for making disallowance of any expenditure it is for the revenue to show that such expenditure is personal in n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogent reason that the order of the ld CIT(A) was inadvertently placed by the office assistant and was traced at the time of finalizing the accounts only. The Hon'ble Supreme Court in Ramnath Sao Vs. Gobardhan Sao AIR 2002 SCC 1201 has held that pedantic and hyper-technical approach should not be taken to defeat the valuable right of the parties to have the decision on merit. No one benefits by causing delay against his own cause or against his own interest. According to us the application for condonation is bona fide and there is sufficient cause shown for the delay. In view of this we allow the application for condonation of delay of the assessee and admit the appeal to be decided on merit. 5. The assessee has raised the following grounds of appeal:- 1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] is bad both in the eye of law and on facts. 2(i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of ₹ 26,57,303/- made by AO on account of purchases made from Suresh Hyp. Enterprises. (ii) That the above ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That the above said disallowance has been confirmed despite the fact that the disallowance made by the AO is adhoc and arbitrary. (iii) That the expenses having been incurred wholly and exclusively for the purpose of business, the learned CIT(A) was not justified in upholding the disallowance of ₹ 31,898/- on account of depreciation on vehicles, (iv) That the disallowance of the depreciation on account of personal use is otherwise untenable in law. 8(i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in upholding the action of the AO in disallowing a sum of ₹ 19,225/- being 10% of the total expenditure incurred on business promotion. (ii) That the above said disallowance has been confirmed despite the fact that the disallowance made by the AO is adhoc and arbitrary. (iii) That the expenses having been incurred wholly and exclusively for the purpose of business, the learned CIT(A) was not justified in upholding the disallowance of ₹ 19,225/- on account of business promotion expenses, (iv) That the disallowance made by the AO is otherwise unsustainable in the absence of any instan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first ground of appeal is general in nature and therefore same is dismissed. 8. The second ground of appeal is with respect to the addition of ₹ 2657303/- on account of purchases made from Suresh HYP Enterprises amounting to ₹ 3192806/- for the reason that the 133(6) enquiry letter sent to that party came back un served because of incorrect address. The assessee produced copy of account, income tax return and bank statement of the party. On verification of the bank statement ld Assessing Officer found that whenever the cheque is credited in that bank account, cash is immediately withdrawn. The AO was further of the view that account is opened by depositing ₹ 1000 and closing balance is also meager. Therefore, the ld Assessing Officer issued letters u/s 133(6) from the bankers of the party who provided incomplete details. The introducer of the account was found to be assessee. Further, the summons issued u/s 131 was not complied. On appeal , The ld CIT(A) after obtaining the remand report sustained the addition on the same grounds. 9. The ld AR submitted that assessee has submitted the copy of ledger account, income tax return, bank statement, and confirmati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is proved in withdrawal of cash from the bank accounts . To verify this ld AO could have obtained these instruments from the bank which he has failed to do. Further, during the course of assessment proceedings, the AO has verified the books of accounts, bills, vouchers, master rolls, bed sheet and logbooks and on such verification, no defect in the books of the assessee was pointed out. The Assessing Officer made the whole addition by pointing out certain lacunas in the bank account of the suppliers of the assessee, which cannot be permitted. Merely because 133(6) notices issued to the party returned un-served though it was the same address, which was supplied by supplier while filing its income tax return, no fault can be put on the shoulder of assessee. Further, the ld CIT(A) confirmed the finding of the ld Assessing Officer without giving any reason but merely reiterating the findings of the Assessing Officer. In view of this the addition made by the ld Assessing Officer of ₹ 2657303/- from Suresh HYP Enterprises cannot be sustained and hence, deleted. In the result ground No. 2 of the appeal of the assessee is allowed. 12. Ground No. 3 of the appeal of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Business promotion 10 19225 5. Expenditure on conveyance 10 75885/- 6. On site expenses 10 55000/- 15. The ld Assessing Officer has made above disallowances on adhoc basis and for the reason that there may be personal expenses or not wholly and exclusively incurred for the purposes of the business. The ld CIT(A) has confirmed the above disallowances stating that disallowances are very reasonable and on account of personal expenses or not wholly and exclusively incurred by the assessee for the purposes of business. 16. Ld. A R vehemently contested that neither the AO nor the CIT appeal has pointed out any such instances of such expenses which are been incurred not for the purpose of the business though the full books of accounts, vouchers bills etc were produced before them. He submitted that ad hoc disallowance without pointing out any instances of such expenses cannot be made. 17. Ld DR supported the order of the lower authority and submitted that instances of personal expense ..... X X X X Extracts X X X X X X X X Extracts X X X X
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