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2022 (10) TMI 977 - AT - Income TaxDisallowance of expenses made by AO - stoppage of production - CIT(A) directed AO to allow 50% of the expenses claimed by the assessee as assessee has not furnished evidences for incurring those expenses before the Assessing Officer - HELD THAT:- As stated that the assessee has stopped production during the year under consideration due to labour strike. It is also further stated that the most of the expenses have been incurred through banking channel. It is the submission of the learned AR that the assessee was carrying on the business/production in the earlier year and only during the year under consideration production had to be stopped. Hence the stoppage of production should be taken as 'temporary lull' in the business and hence there was no necessity in disallowing the entire expenses claimed by the assessee - See MICRO TURNERS (P) LTD. VERSUS JCIT, ROHTAK [2016 (5) TMI 284 - ITAT DELHI] Dispute may be put to rest by making disallowance of part of expenses claimed by the assessee. This is due to the fact that considerable time, i.e., more than nine years have elapsed from the date of closure of the financial year. This issue should be settled at this stage. Considering the fact that similar expenses have been allowed in the earlier years and since it was submitted that most of the expenses have been incurred through banking channels and the nature of expenses would show that they are normal expenses incurred in the course of business, disallowance of expenses for non-production of vouchers may be restricted to 10% of the expenses claimed by the assessee and, in my view, the same would meet the ends of justice. Appeal filed by the assessee is partly allowed.
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