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2016 (6) TMI 686 - ITAT DELHIAddition on account of freight expenditure - sales have increased by 100% such expenses have increased only by 40% and these expenses are directly linked with turnover of sales and purchases - Held that:- As the disallowance not specific and Ld. AO has not pointed out a single instances of the expenditure, which are not, supported by the vouchers and bils. Further, the estimated amount of disallowance by applying the percentage is also not proper. Therefore, we confirm the order of the Ld. CIT(A) in deleting the disallowance on account of freight and cartage expenses. - Decided in favour of assessee Disallowance of tools and consumables expenses - Held that:- You cannot be stock of the material when it was purchased on need basis. Further in previous year also there is no opening stock therefore it cannot be said that explanation of the assessee is not proper. In any way the closing stock of this year becomes opening stock of next year and therefore at the most there would be shifting of profit from one year to another year and tax rates being same for both the years the issue would be tax neutral. Furthermore reading purchases of fuel it was not the case of ld AO that the bils of the material are not available or material has not been procured. Stating that purchases have been made in cash cannot be the basis for making disallowance . For cash purchases exceeding specified monetary limit is disallowable u/s 40 A (3) of the act. No such disallowance has been made by the ld AO. In view of this , We do not find any infirmity in the order of the Ld. CIT(A) hence, we confirm the order of Ld. CIT(A) in deleting the disallowance on account of expenses of tools and fuel expenses. - Decided in favour of assessee
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