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2015 (12) TMI 1542 - AT - Income TaxAddition on account of Freight Expenses, Packing Expenses, Power & consumption Expenses, Machinery Expenses and Tools & Consumable Expenses - Held that:- For freight assessee submitted before AO detailed copy of account showing that assessee engaged M/ Swift freight movers as freight forwarders for export shipment and all payments were made by cheques and further Tax deduction at source was also made by appellant. Therefore in our opinion the above facts read together gives complete picture of the freight expenses and to whom it is paid and whether he is assessed to tax and whether such expenses are in relation to export sales. This would have open floodgates of information for the AO to determine whether expenditure incurred by assessee are wholly and exclusively for the business or not. But no such efforts were made. Therefore statement of AO that there is no documentary evidence is produced by assessee before him is a hollow statement. Further the assessment proceedings started with the first notice u/s 143(2) on 18.09.2008 and assessment continued and concluded on 18.12.2009 i.e. almost 14 months , this time period shows that AO has ample time to exercise all the power vested up on him by the Act and gather adequate evidence to make concrete disallowance, if at all any. The powers bestowed up on assessing officer are very wide and most effective which were used very sparsely in this case. Therefore there is no basis, except statistics, for making contested disallowance in the hands of assessee. In our view this is not sufficient to uphold disallowances. In this back drop, ad hoc disallowance made by AO cannot be sustained and CIT (A) has rightly deleted the same. Therefore we confirm the order of CIT (A) and dismiss the appeal of revenue.
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