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2015 (6) TMI 320 - AT - Income TaxDisallowance under the head “Purchase and Vendor Purchases” - CIT(A) deleted the addition - Held that:- AO has made the disallowance purely looking into the past history of the case and that too, twice the amount surrendered in the last year. Neither the AO has adduced any material, rational basis nor any justification for the doubling the addition made during the year. We further find that the business results of the assessee are certified by the audited accounts by the Auditors, M/s Vimla Chand Jain & Co., Chartered Accountants as per the Tax Audit Report in Form No. 3CB and 3 CD dated 28.10.2006 which clearly reflect that on or before 28.10.2006, vouchers / bills were available with the assessee and on the basis of which the audit of the accounts was conducted and report in Form No. 3CB & 3CD alongwith the return of income was filed on 31.10.2006. But since an accidental fire happened on 23.9.2007 i.e. after the audit was conducted on 28.10.2006, it can be safely assumed that the Auditor had prepared the Report based on the vouchers/ bills with the assessee and so it is authentic, since the said audit report have not been challenged by the AO at all. Therefore, simply on the ground that in previous year, the assessee made surrender cannot be the basis for disallowance which smacks of arbitrariness, which is the sworn enemy of Article 14 of the Constitution and the Ld. CIT(A) has rightly deleted the adhoc disallowances - Decided against revenue. Disallowance of expenses under the head Freight & Octroi, Staff & Workers welfare, traveling expenses, Diwali expenses, telephone expenses and Repair & maintenance CIT(A) deleted the addition - Held that:- We concur with the Ld. CIT(A) that AO disallowed expenditure under these heads without any material or reasons brought on record, so it is unsustainable in the eyes of law. So, we are inclined to confirm the order of the Ld. CIT(A) on this issue - Decided against revenue.
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