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2018 (5) TMI 256 - ITAT MUMBAIDisallowance of expenditure limned by the assessee was not allowable as the expenses belong to another entity- bills issued by RRT were the names of Della Technician and not in the name of the assessee - Held that:- RRT in its letter dated 29/01/2013 has specifically mentioned that inadvertently bills belonging to the assessee were issued in the name of Della Technicia. We are unable to understand as to why the FAA discarded this evidence though the same was produced before him. He could have called for remand report or could have examined RRT in that regard. But, he simply confirmed the order of the AO. In our opinion the course adopted by the FAA is not as per the law. As a representative of the State, he is supposed to be an instrument in collecting due taxes and pass and adjudication order based on the evidences. As he has failed to do so, therefore, reversing his order we decide first ground of appeal in favour of the assessee. Disallowance of staff welfare expenses - Held that:- As AO said assessee was engaged in constructing villas in remote area. Considering the above fact, in our opinion, expenditure incurred for purchasing television sets, refrigerators etc. cannot be disallowed. The necessity of the business is to be decided by the assessee itself and not by the AO. It is not the case of the revenue authorities that those items were used by the family of the directors of the company for by the families of the officers of the company. It is said that AO. s should not step into the shoes of the assessee. Considering the peculiar facts of the case, we are of the opinion that the FAA was not justified in confirming the disallowance made by the AO. - Decided in favour of the assessee. Disallowance of the labour charges - Held that:- The details given by the assessee had to be further investigated. Therefore, in the interest of Justice, we are restoring that the issue to the file of the AO. He’s direct to afford a reasonable’ into the assessee. The assessee would five detailed submissions and explanation before the AO.- Decided in favour of the assessee for statistical purposes. Deduction in closing value of work in progress - Held that:- In the circumstances we hold that no reduction can be made as far as the amounts involved in grounds of appeal no. 1-3 are concerned. The AO is directed to restrict the reduction of work in progress to the undisputed disallowances only. Last ground is decided in favour of the assessee.
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