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2018 (1) TMI 659 - ITAT DELHIDisallowance of the power and fuel expenses - Held that:- Despite there being Sales Tax Number available in the bills supplied by the parties to the assessee the Ld. assessing officer should have referred if he has any doubt to the sales tax authorities about the veracity of the purchases made by the assessee. The assessing officer has not done so. The assessing officer has also not passed the information to the assessing officer of those parties to verify the purchases. In view of this facts merely on the basis of conjectures and surmises the Ld. assessing officer has made a disallowance of power and fuel expenses. Even otherwise if the Ld. assessing officer is of the opinion that the purchases are bogus, he should have disallowed the amount of purchases of that particular party and not an ad hoc disallowance should have been made. CIT (A) has confirmed the disallowance only for the reason that assessee has not produced further details but he has not given any reason or any clue about what further details assessee should have furnished before the assessing officer. In the result we do not find any reason to confirm the orders of the lower authorities. Therefore we reverse the finding of the lower authorities and the direct the Ld. assessing officer to delete the disallowance of ₹ 25 Lacs out of the power and fuel expenditure. In the result ground No. 1 of the appeal of the assessee is allowed. Addition on account of meeting and conference expenses - Held that:- The assessee has incurred these expenditure for the purpose of business of the assessee and also given a detailed reason thereof. Furthermore, the assessee has submitted the requisite detail before the AO. The AO has not stated that what details have not been submitted and if the details have not been submitted by the assessee then expenditure should have been disallowed to that extent. The Ld. assessing officer has made the ad hoc disallowance, without pointing out any instances of the expenditure for which the information is not made available by the assessee. Therefore the disallowance made by the Ld. assessing officer and confirmed by the Ld. CIT (A) cannot be sustained. In the result ground No. 2 of the appeal of the assessee is allowed. Disallowance u/s 40 A(3) - Held that:- In the present case the assessee has made the payment in excess of the amount specified and could not also justify the claim of the assessee that such payment falls under the exception covered under rule DD of the Income Tax Rules, 1962. In view of this, we do not find any infirmity in the order of the Ld. assessing officer in making the above disallowance of ₹ 48650/–. In the result ground No. 3 of the appeal of the assessee is dismissed. Penalty u/s 271(1)(c) - Held that:- In the assessment order the ld Assessing Officer vide recording the satisfaction has stated that assessee has concealed or furnished inaccurate particulars of its income. In the penalty order in para No. 5 the ld Assessing Officer has noted that assessee has furnished inaccurate particulars resulting in concealment of income. The ld CIT(A) has deleted the penalty following the decision of the Hon'ble Supreme Court in case of CIT Vs. Reliance Petro Products Pvt. Ltd [2010 (3) TMI 80 - SUPREME COURT ] - Decided in favour of assessee.
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