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2022 (5) TMI 930 - ITAT AHMEDABADAllowable business expenses - Addition made as expenses were not incurred wholly and exclusively for the purpose of the business - Labour charges, freight inward expenses, freight outward expenses, loading unloading expenses, stores and spares and packing materials - HELD THAT:- We note that the AO has made the disallowance of the expenses for various reasons. One of the reason was that the details were not furnished by the assessee whether the expenses were paid through the banking channel or in cash. We disagree with the finding of the AO for the reason that the assessee has duly furnished the copies of the expenses ledgers and the ledger of all the parties to whom the payments of such expenses were made which are placed on paper book. The party wise ledgers contains the details of the mode of payment which is through banking channel. Similarly, the assessee has also filed the copy of the bank statement which is placed. Likewise there were addresses furnished by the assessee of all the parties to whom the payment was made against the expenses. However, the AO has not verified from any of the party despite having the power under the statute under the provisions of section 131(1)/133(6). Assessee has not furnished the details of the TDS - On perusal of the paper book filed by the assessee, particularly pages 693 to 724, we note that the assessee has furnished details of TDS deducted and the copies of the TDS return acknowledgment. Assessee has not furnished the bills of the parties as well as the copies of the vouchers for payment - On perusal of the paper book, we also note that such details were not furnished by the assessee. However, in our considered view in the absence of such details, there cannot be any disallowance of the expenses. It is for the reason that the AO was provided the addresses of the parties to whom the payment was made, their ledger accounts showing the amount was paid through the banking channel after the deducting the TDS against such exp.nses. If the AO had any doubt on the genuineness of the expenses in the absence of the bills and vouchers, the AO was very much empowered to call for the details from the respective parties. But he has not done so. Moreover, there were other details which were available on record wherein no defect was pointed out by the AO. Thus, in our considered view there cannot be any disallowance of the expenses in the given facts and circumstances in ad hoc manner. Assessee failed to furnish the copy of the bank book and the bank statement - With respect to the cash book, the learned AR before us contended that the copy of the cash book was never demanded by the AO during the assessment proceedings. Accordingly, the assessee has not furnished the same. This contention of the learned AR was not controverted by the learned DR at the time of hearing. Accordingly, we note that the assessee cannot be penalized on account of nonfurnishing the cash book in the given facts and circumstances. Disallowance of testing charges - Assessee has filed the necessary details of such expenses. The details include the ledger copies of the parties and the major bills issued by the parties which are placed on pages 207 to 249 of the paper book. The AO has not pointed out any defect in the details furnished by the assessee. In the event, the AO had any doubt on the genuineness of such expenses, he was empowered under section 133 (6)/131 of the Act to carry out the necessary verification. But he has not done so. Ad hoc disallowance towards bank commission/bank guarantee expenses - We note that the assessee has furnished the copies of the ledger of such expenses. The assessee in support of its expenses has also filed the bank statements which are placed on pages 251 to 438 of the paper book. The details of such expenses were very much available during the remand proceedings before the AO. Therefore the same cannot be disallowed on adhoc basis. Disallowance of brokerage expenses - We note that all the necessary details along with the bills were filed by the assessee which are placed along with the copy of the ledger. But the AO has not doubted on the genuineness of such details filed by the assessee. Thus we are of the view that the impugned expenses incurred by the assessee were genuine. However, the same cannot be allowed in the under consideration for the reason that the assessee failed to deduct the TDS in the year under consideration. Disallowance of depreciation - We note that the assessee has furnished the details of the bills of the major assets which are placed. However, no defect of whatsoever has been pointed out by the AO in these details. Accordingly we are of the view that there cannot be any disallowance of depreciation as alleged by the AO. DR at the time of hearing has not brought anything on record contrary to the finding of the learned CIT (A). In view of the above and after considering the facts in totality, we do not find any reason to interfere in the finding of the learned CIT (A). Accordingly we uphold the same. Hence the ground of appeal of the Revenue is dismissed. CIT (A) has admitted the additional evidences in contravention to the provisions of rule 46A of income tax rule - On perusal of the above provisions, we note that the learned CIT (A) has been empowered to admit the additional evidences. In the present case, the learned CIT (A) has exercised his power granted to him under section 250 of the Act and sub rule 4 of rule 46A of Income Tax Rule and therefore has admitted the additional evidences. Thus, we do not find any merit in the ground of appeal raised by the Revenue. Hence, we dismiss the same. Revenue appeal dismissed.
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