TMI Blog2014 (4) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... ce is made and is not considered by the Assessing Officer, it cannot be held as fault on the part of the assessee - CIT(A) rightly appreciated the situation and granted partial relief –Decided against Revenue. High ad-hoc disallowance – Held that:- The AO has failed to act in a judicious and objective manner to point out the exact nature of non-compliance and its effect on expenditure - he has substantially disallowed the expenditure on ad hoc basis - there is no justification in such disallowance – thus, there is no justification in again retaining small disallowance on ad hoc basis without giving any reason - there is no justification to retain any disallowance of expenditure made by the assessee without any objective finding about the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustified in deleting the addition of Rs. 43,000/- made by the AO on a/c of disallowance of misc. expo Paid for mobile purchased for staff by entertaining a new ground that small mobile sets below Rs. 5,000/- were purchased for the staff without calling for the remand report from the AO or without recording his satisfaction for entertaining such new ground as warranted by the ratio decidendi of the judgment of the Hon'ble Supreme Court in the case of Jute Corp. of India Ltd. VS. CIT (1991) 187 ITR 688 (SC) . 5. Whether the Ld. CIT(A) is justified in deleting the addition of Rs. 49,587/- made by the AO u/s 68 of the IT Act, 1961 out of the suspense a/c of Rs. 49,287/- by entertaining entirely new ground raised by the assessee before h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d first appeal and made various pleadings including the written submissions on the following lines:- (vi) Details of following expenses Conveyance Travelling Diwali Expenses Electricity and water Miscellaneous expenses Repairs and Maintenance Salary to Manager Salary to Staff Telephone Expenses 5. In response thereto, the assessee filed various details along with supporting evidence vide letters dated 31.10.11, 4.11.2011 and 18.11.2011. The copies of these replies were filed before the Commissioner of Income Tax(A) also. 6. Ld. Assessing Officer without verifying or looking into the details filed by the assessee and without asking any further information added the amount of Rs.13,26,443/-. He made the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered the order of the AO and the submissions of the assessee and I find considerable merit in the submission of the assessee that there is no proper justification for making such high ad-hoc disallowances and accordingly the addition to the extent of Rs.50,000/- is confirmed on the ground of personal use and the balance addition of Rs 2,18,072/- (Rs 3,28,072/- (-) Rs 50,000/-) is deleted. Rs. 1,66,798/- under the head annual day celebration C(iii) I have considered the order of the AO and the submissions of the assessee and I find considerable merit in the submission of the assessee that there is no proper justification for making such high ad hoc disallowances and accordingly the addition to the extent of Rs 50,000/- is confirmed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Book, it is clearly demonstrated that all the relevant details asked for by the Assessing Officer were duly produced before the assessment. It is unjustified on the part of Assessing Officer that conclusive evidence or complete evidence was not produced. The Assessing Officer is obliged to give the nature of non-compliance made by the assessee vis-a-vis what is filed by the assessee. A sweeping statement cannot be given that the assessee failed to file conclusive evidence or proper evidence as such observation becomes non-specific having no objective basis. In this eventuality, ld. Commissioner of Income Tax(A) observed that the assessee has made due compliance before the Assessing Officer. When the compliance is made and is not considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justification. The assessee had made full compliance and Assessing Officer has merely made sweeping observation that conclusive and complete evidence has not been produced. Therefore, additions are being made. In our considered view, the Assessing Officer has failed to act in a judicious and objective manner to point out the exact nature of non-compliance and its effect on expenditure. At the end, he has substantially disallowed the expenditure on ad hoc basis. Therefore, there is no justification in such disallowance. In our considered view, the ld. Commissioner of Income Tax(A) has principally agreed with the submissions of the assessee. This being so, there is no justification in again retaining small disallowance on ad hoc basis without ..... X X X X Extracts X X X X X X X X Extracts X X X X
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