TMI Blog2014 (5) TMI 919X X X X Extracts X X X X X X X X Extracts X X X X ..... or the reason that some of the expenses have been incurred in cash and therefore there is likelihood of some portion is not justified - CIT(A) has also not pointed out any specific instance of cash expenditure which is an unjustified expense - the disallowance of Rs.4 lac of the labour expenses is uncalled for – Decided against Revenue. Disallowance of travelling and office expenses – Held that:- In the absence of complete details AO disallowed 20% of expenses which was scaled-down to Rs.25,000 - the assessee maintains several vehicles such as JCB Machines, Jeep, tractor-trailer for the purpose of business and it has office at Surat and Baroda and has business transactions with Companies stationed outside Surat, the CIT (A) was justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of assessment proceedings the A.O. noticed that assessee has claimed labour supply expenses of Rs.74,31,319/-and labour wages expenses of Rs.1,73,04,337/- aggregating to Rs.2,47,35,656/-. The assessee had also claimed fabrication of labour expenses of Rs.38,05,673/- and loading and unloading charges of Rs.24,92,664/- aggregating to Rs.62,98,337/-. The A.O. asked the assessee to produce original muster roll, job card, attendance register etc., but the same was not produced. Thereupon the A.O. issued Show cause notice wherein it was stated that in the absence of proper vouchers and records, why 25% of Rs.2,47,35,656/- and 20% of Rs.62,98,337/- not be disallowed. In response to the show cause notice the assessee submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Based on the submissions made by the assessee, CIT (A) gave partial relief to the assessee by holding as under:- 8. I have gone through the facts of the case, the reason given by the A.O. for rejecting the books of accounts and submissions of the appellant during the course of appeal proceedings. The appellant had provided all the details and evidences regarding incurring of expenses to the A.O. The A.O. rejected the books of accounts for the reason that the evidence regarding rendering of service and correlation of the expenses with volume of work done had not been established by the appellant. It is seen from the assessment order that the appellant had not been asked to carry out such an exercise and therefore drawing adverse conclusi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the order of the A.O. be upheld. 6. On the other hand, the Ld. AR. Submitted that the A.O. had made disallowance by making a general remark without pinpointing any instance of wrong/bogus payment. The assessee s books of accounts are audited and there has been no qualification of the auditors. The Ld. A.R. pointed out that the net profit ratio of the assessee has jumped from 1.95% to 5.25%. Thus the Ld. A.R. requested that the disallowance of Rs.4 lac out of labour charges sustained by the CIT (A) be deleted. 7. We have heard the rival submissions and perused the material on record. The factual matrix is that the assessee during the course of assessment proceedings had offered explanation with respect to the expenses and also pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,87,471/- as travelling expenses. The assessee was asked to justify the expenses to which the assessee replied that the expenses have been incurred for the purpose of business. The contention of the assessee was not acceptable to the A.O. because the assessee was not in a position to produce relevant vouchers and proper evidence. He accordingly disallowed 20% of the aggregate expenses of Rs.3,72,795/- (i.e. disallowed Rs.74,559/-). The assessee carried the matter before CIT (A). CIT (A) restricted the disallowance to Rs.25,000/-. Against the deletion of disallowance the Revenue is in appeal before us and the assessee in its Cross objection has objected to the disallowance of Rs.25,000/-. 9. Before us the Ld. D.R. relied on the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le basis and the assessee had claimed the credit for TDS. He accordingly added Rs.2,45,538/- to the income. Aggrieved by the action of A.O., the assessee carried the matter before CIT (A). CIT (A) dismissed the ground of the assessee for the following reason: 12. I have gone through the facts of the case. It is true that the appellant is entitled to employ different method of accounting for different sources of income. However, for the same source of income same method of accounting is to be employed. The appellant had earned interest income on F.Ds which had been taken to provide bank guarantees. The said F.D. was therefore business assets and income earned there from was business income. In the case of the appellant it cannot be said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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