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2019 (7) TMI 1210 - AT - Income TaxAddition on account of lower GP - HELD THAT:- AO in absence of necessary documentary evidences rejected the books of account. AO also recorded that a survey was conducted by the investigation wing of the revenue on Tayal group in Mumbai on 10 September 2013, wherein the statement of Shri Praveen Kumar Tayal was recorded. During the course of survey, instances of claim of bogus expenses on account of purchase a capital assets were found. The assessee is stated to be beneficiary of bogus expenses. AO in absence of evidence estimated ad hoc addition by treating the GP rate of earlier years as a benchmark. Before CIT (A) no documentary evidences were furnished except repeating the same stand as taken before the assessing officer. CIT (A) confirmed the action of assessing officer in absence of any documentary evidences. Before us, the assessee neither filed any documentary evidences nor any written submission to substantiate this ground. Therefore, we do not find any justification to interfere with the finding of learned CIT (A). In the result this ground of appeal is dismissed. Disallowance of administrative expenses - HELD THAT:- While working the disallowances the AO worked out disallowance of ₹ 2.61 crore. Before learned CIT (A) the assessee stated that the administrative expenses is only just 2.87% of turnover and that in preceding year it was 2.42% of the total turnover. The assessee also stated that the turnover of assessee was increased about 17% from the proceeding financial year. CIT (A) after considering the submission of the assessee concluded that in absence of any corroborative evidence it cannot be said that the assessee has discharged onus. CIT (A) confirmed the action of the AO. However, on the working of disallowances the AO was directed to correct the figure of disallowances. Before us the assessee neither furnished any documentary evidence not filed any written submission to substantiate the ground of appeal, therefore, we do not find any justification in interfering the finding of CIT (A). In the result this ground of appeal is also rejected. Addition on account of non- utilisation of loan - AO disallowed 14% of loan - CIT(A) deleted the addition - HELD THAT:- Disallowances are based on an assumption and presumptions that entire working capital limits availed by assessee was not utilised for the purpose of business. There is nothing on the record that the assessee has diverted interest bearing borrowed funds by granting interest free loans to sister concern. The assessee has shown that against working capital loan of ₹ 208.03 crore, it was having closing inventory of 197.87 crore and directors of ₹ 154.32 crore respectively which is aggregating to ₹ 352 .15 crore. the working capital loan availed from the bank was around 59.07% of the current asset. The turnover of the assessee was increase from ₹ 611 Crore to ₹ 718 Crore i.e 17%. Therefore it cannot be concluded that the assessee used the working capital for other than business purpose and deleted the disallowances. We have seen the finding of the CIT (A) is based on sound reasoning. No contrary facts is brought to our notice to take to take other view, thus, we affirm the action of the ld. CIT (A). In the result this ground of appeal is dismissed. Disallowance u/s 14A - no exempt income received - HELD THAT:- The learned CIT (A) after considering the submission of the assessee and following the ratio laid down by Hon’ble Delhi High Court in Cheminvest ltd [2015 (9) TMI 238 - DELHI HIGH COURT] held that no disallowance u/s 14A is called for, once there is no exempt income received or receivable by the assessee during the relevant previous year. We have noted that the AO nowhere in the assessment order has a specified that the assessee has received any dividend income during the relevant period. In absence of any finding of AO that the assessee earned any exempt income, we are in agreement with the finding of learned CIT (A) that during the relevant period the assessee has not received any exempt income therefore, no disallowance u/s 14A is warranted. In the result the ground of appeal raised by revenue is dismissed
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