9911796707
TMI Blog2014 (3) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... AO treating supplementary claim as income accrued during the year under consideration on a completely different footing by estimating the same amount as expenditure incurred for raising the above supplementary claim. Ld.CIT(A) accepted the fact that due to uncertainty of income to be received for the supplementary claim raised, no addition of such uncertain income made by AO could be sustained but then proceeded to confirm disallowance of estimated expenditure at the same amount of Rs.8.25 crores resulting in addition to the returned income. The order of ld.CIT(A) being bad in law, perverse ad against accountancy principles deserves to be quashed. 2. Ld.CIT(A) further erred in law and on facts in denying deduction claimed of Rs.5,63,64,860 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nafter referred to as "the Act") was framed vide order dated 27/12/2010, thereby the Assessing Officer(AO) made various disallowances/additions; namely, demurrage charges amounting to Rs.5,44,598/-, loss of gunny bags amounting to Rs.19,70,625/-, claim of FCI of Rs.8,25,00,000/-, out of tele. & mobile of Rs.47,480/-, out of personal use of car of Rs.2,85,480/- and out of vehicle running expense of Rs.73,460/- totalling to Rs.8,54,21,643/- and computed the income assessed at Rs.6,12,96,748/- after deducting the total income loss of Rs.2,41,24,895/-. 4. First ground is against the confirmation of addition of Rs.8.25 crores made by the AO treating the supplementary claim as income accrued during the year under consideration. 4.1. The ld.coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble Gujarat High Court rendered in the case of CIT vs. Navsari Cotton and Silk Mills reported at 135 ITR 546 (Guj.). He submitted that the ld.CIT(A) was not justified in holding that since the assessee following mercantile system of accounting, therefore "matching principle" is an important ingredient. He submitted that the ld.CIT(A) disallowed the expenditure on presumption basis without giving any finding that how much expenditure was incurred for earning of the receipt of Rs.8.25 crores. 4.2. On the contrary, ld.CIT-DR Shri OP Vaishnav strongly supported the orders of the authorities below and submitted that the assessee himself has claimed the expenditure and has not taken into account the corresponding income. He submitted that this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee on such expected receipt. Therefore, this issue is restored back to the file of ld.CIT(A) for decision afresh in respect of the disallowance of expenditure. Thus, this ground of assessee's appeal is allowed for statistical purposes only. 6. Second ground is against in disallowing the claim of the assessee amounting to Rs.5,63,64,860/- being the business expenditure. 6.1. The ld.counsel for the assessee submitted that various show-cause notices were issued by the FCI and the assessee has claimed expenditure of Rs.5,63,64,860/- forming part of the show-cause notices. He submitted that ld.CIT(A) disallowed the claim on the basis that the assessee's liability under the show-cause notices/debit notes was disputed and non-crystall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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