TMI Blog2013 (9) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... , some disallowance is justified on account of this failure of the assessee to furnish reasonable details for such a huge claim of expenditure of more than Rs.70 lacs approximately. The disallowance made by the AO is to the extent of 10% of such claim but we feel that in the facts and circumstances of the present case, ends of justice would meet if such disallowance is restricted to 5% of the total such claim of Rs.70 lacs approximately. Hence, disallowance of Rs.3.50 lacs is confirmed and balance disallowance is deleted. Disallowance of expenditure - Building repairing expenses - Capital or revenue expenditure - Held that:- While the assessee has claimed expenses for fitting of kota stone on various dates in respect of construction of new mill building, but no expenditure is incurred in respect of purchase of kota stone and such expenditure for purchase of kota stone is included in building repairing expenditure without including any labour charges on that account. This supports the stand taken by the AO that these expenses were in fact incurred for construction of new mill building and not for any repairing purpose. Similarly, the details regarding construction of new building ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me line, in the present year also, similar disallowance of 10% was made and the disallowance was worked out to Rs.7,00,607/-. Being aggrieved, the assessee carried the matter in appeal before the learned CIT(A) who has deleted this disallowance on the basis that in the assessment year 2007-08 also, similar disallowance was deleted as per the order dated 20-10-2009. Now, the Revenue is in appeal before us. 4. The learned DR for the Revenue supported the assessment order. He also submitted that in the assessment year 2007-08, appeal was filed by the Revenue before the Tribunal but the same was dismissed in limine because of low tax effect in ITA No.156/Ahd/2010 dated 06-07-2012. He also submitted that copy of the Tribunal order is available on pages 18 to 19 of the paper book submitted by the assessee. He also submitted that the details of cash discount is available on page 20 of the paper book and from the same, it can be seen that only month-wise figures are given without any further details or description. He placed reliance on the judgment of the Hon'ble Kerala High Court rendered in the case of United Film Exhibitors Vs CIT reported in 316 ITR 432 (Ker). He also placed relianc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of the learned CIT(A) in the assessment year 2007-08 being order dated 20-10-2009 but the copy of this order of the learned CIT(A) for the assessment year 2007-08 is not brought on record before us. There is no finding given by the learned CIT(A) in the present year that any vouchers were examined by him even on sample basis. There is no finding of the learned CIT(A) on this aspect also that the expenses are fully supported by any voucher. In the present year, it is noted by the AO that name and addresses of the purchasers to whom discount etc. were given and genuineness of the discount/expenses were not brought on record by the assessee. In the light of these facts, it is seen that the facts in the present year are different from the facts in assessment year 2004-05 and 2005-06 and, therefore, the decision of the learned CIT(A) cannot be upheld on the basis of principle of consistency. As per the details available on page 20 of the paper book, we find that the total amount debited under the head cash discount is of Rs.72.83 lacs and the credit under that head is of Rs.3.32 lacs. Apart from that, a debit of Rs.0.55 lacs is on account of rate difference and total net debit is of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es were in fact related to new mill building but were debited in repairing expenditure. In reply to these arguments, it was the submission of the learned AR of the assessee that those expenses were also included in the details of addition to building and, therefore addition made by the AO is rightly deleted by the learned CIT(A). 9. We have considered the rival submissions and we find that the main basis of making this addition by the AO was this that these expenses claimed by the assessee under the head "building repairing charges" were in fact related to new building and, therefore, should be capitalized. The argument of the learned DR for the Revenue was also same that the main expenditure included in repairing expenses is on account of colours, cement and kota stone etc. and no such expense was included in the details regarding addition to building. When we examine the details of addition to building, we find that it includes expenditure on account of labour charges for fitting of kota stone on several dates but, there is no amount in respect of cost of kota stone included in the details for construction of new building and the expenditure on account of kota stone is appearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of new mill building and, therefore, this basis given by the learned CIT(A) is also not conclusive to hold that the disallowance made by the AO is not justified. We have examined the facts and found that while the assessee has claimed expenses for fitting of kota stone on various dates in respect of construction of new mill building, but no expenditure is incurred in respect of purchase of kota stone and such expenditure for purchase of kota stone is included in building repairing expenditure without including any labour charges on that account. This supports the stand taken by the AO that these expenses were in fact incurred for construction of new mill building and not for any repairing purpose. Similarly, the details regarding construction of new building as available in the paper book have not included any expenditure on account of colours and paints. The building is completed in the present year because depreciation is duly allowed by the AO with regard to such new mill building, then how it can be expected that no expenditure in respect of colour and paints etc. were incurred for this new mill building and such expenditure included in the details of building repairing is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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