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2015 (4) TMI 751 - AT - Income TaxDis-allowance of expenditure related to raw material discarded, miscellaneous expenses , expenses related to manufacturing, production and event management expenses, administrative expenses etc. on adhoc basis - Held that:- We have considered the rival contentions and found that assessee has not furnished any detail with regard to claim of deduction on account of raw material discarded. The ld. CIT(A) has also given opportunity to the assessee during remand proceedings but the assessee could not furnish any detail to the satisfaction of A.O. After considering the remand report, the ld. CIT(A) has confirmed the disallowance vide para 14.5 of his appellate order which has not been controverted by the ld. A.R. by bringing any positive material on record. Accordingly we do not find any reason to interfere with the orders of ld. CIT(A) confirming the disallowance of ₹ 55,43,439/- on account of raw material discarded. Accordingly ground No. 1 of assessee’s appeal is dismissed. We have considered the rival contentions and found from record that out of total claim of ₹ 28.91 lacs on account of miscellaneous expenses, the A.O. has disallowed an adhoc sum of ₹ 10 lacs out of which the ld. CIT(A) has confirmed the disallowance of ₹ 5 lacs. However, while sustaining the disallowance, the ld. CIT(A) observed that the A.O. has not pointed out any specific requirement because of which he has doubted the genuineness of expenditure, therefore, keeping in view the fact that the expenditure was not supported by necessary supporting evidence, the ld. CIT(A) has confirmed the disallowance to 50%. We do not find any infirmity in the order of ld. CIT(A), accordingly, the disallowance of ₹ 5 lacs confirmed by the ld. CIT(A) is hereby upheld. Accordingly ground raised by assessee & Revenue are dismissed. We have considered the rival contention and found that a categorical finding has been recorded by the ld. CIT(A) to the effect that at no stage the A.O. had any material on record or any verification report for quantification of probable cash expenditure above ₹ 20,000/- which would be hit by mischief of section 40A(3) of the Act. The ld. CIT(A) further found that even the tax audit report did not include any list of cases where there was expenditure above ₹ 20,000/- which attracts provisions of section 40A(3) of the Act. Since the findings recorded by the ld. CIT(A) has not been controverted by the ld. D.R. by bringing any positive material on record, we do not find any reason to interfere with the order of ld. CIT(A) deleting the disallowance made u/s 40A(3) of the Act. It was argued by the ld. A.R that the assessee has filed return at a loss of ₹ 38.33 crores, therefore there is no reason for claiming any bogus expenditure. He further contended that full details of expenditure along with books of account and supporting bills/vouchers were placed before the A.O. during remand proceedings, wherein no specific instance was pointed out by A.O. regarding non-genuineness of expenses or non-availability of supporting bills and vouchers. Accordingly it was submitted that no disallowance should be sustained. In respect of manufacturing expenses, following the same reason mentioned above, restrict the disallowance out of manufacturing expenses at ₹ 15 lacs. - Revenue appeal dismissed and appeal of the assessee is partly allowed.
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