TMI Blog2015 (7) TMI 994X X X X Extracts X X X X X X X X Extracts X X X X ..... lation', 'absence of supporting evidence', 'not properly vouched' are the reasons for these disallowances - Held that:- The disallowance made by the Assessing Officer is reasonable and not excessive and since the partners of the assessee firm are not having separate personal telephone and vehicles, it is reasonable to assume that the telephone and vehicles were partly used for personal purposes also and therefore, on this issue also, the order of CIT(A) is not sustainable. We reverse the order of CIT(A) and restore that of the Assessing Officer.- Decided in favour of revenue. - ITA No.726/LKW/2013 - - - Dated:- 28-7-2015 - Shri Sunil Kumar Yadav and Shri A.K. Garodia, JJ. For the Petitioner : Smt. Swati Ratna, D. R. For the Respondent : None ORDER PER A. K. GARODIA, A.M. This is Revenue s appeal directed against the order passed by learned CIT(A)-II, Kanpur dated 27/06/2013 for the assessment year 2004- 05. 2. None appeared on behalf of the assessee on the appointed date of hearing although adjournment was granted on several occasions with last opportunity and on the present date of hearing i.e. 25/06/2015 also, an application for adjournment was f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ledger account of conveyance revealed that entire payment was made in cash. 6. That the Ld. CIT(A) has erred in law and on facts in deleting the addition of ₹ 50,000/- out of ₹ 3,30,298/- made on account of oil and fuel used for generators without appreciating the fact that most of these expenses were incurred in cash and they were not open to full verification. 7. That the Ld. CIT(A) has ignored the facts in deleting the addition of ₹ 36,000/- out of depreciation that the partners are not in the ownership of any other car apart from these two cars and some alignment of personal use is involved in the usage of these vehicles. 8. That the order of the Ld. CIT (A) being erroneous in law and on facts needs to be vacated and the order of the A.O. be restored. 5. We have considered the submissions of Learned D.R. of the Revenue, perused the material available on record and gone through the orders of the authorities below. 6. Ground No. 1 to 3 are in relation to the deletion of addition of ₹ 43,000/- and ₹ 3,42,121/- u/s 41(1) and ₹ 8,13,238/- being addition made u/s 28 read with section 68 of the I.T. Act. These issues were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udited u/s 44AB and accepted by the department. 10. The nature of business of the appellant is also to be considered where the extensive, emergent and temporary nature of sundry creditor is part of such business. Considering the same and if full details of each entry was available with the AO, the same cannot be rejected as such without verification and without any material contradicting such entries or unless the trading results and the books of account of the appellant were rejected by the AO on such material as is required for this purpose. On verification of ledger accounts, it is found that there has been running with these parties and repayments are made by the assessee. There has been continuous scrutiny assessments wherein these repayments have been accepted. As on today, the accounts stand closed. In view of above discussions, the AO is directed to delete the additions of ₹ 43,000/-, ₹ 3,42,121/- and ₹ 8,13,238/-, as per grounds no.2, 2(i) to 2(iii), 3(i) 3(ii) and 4(i) 4(ii) of appeal are allowed. 7. We also find that it is noted by Assessing Officer on page 3 of the assessment order that the outstanding liability of ₹ 43,000/- is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 36,300/- are also added by the AO in the similar manner without assigning any reason. It is noted that 'possibility of making personal/non business purposes', 'possibility leakages/ inflation', 'absence of supporting evidence', 'not properly vouched' are the reasons for these disallowances. Obviously, these are general observations and no specific example/instance observed by AO on which this observation is based At the same time, the books of account of the appellant are maintained and audited and have also been produced before the AO, same have been examined and primafacie accepted by her. In view of the decision in the case of CIT vs. Utkal Alloys Ltd. 226 CTR (Ori.) where it was held that In absence of any defect found out in books of account maintained in regular course of business no addition can be made to income disclosed by the assessee in its return of income on basis of discrepancy worked out on estimation of stock . 22. The ratio of the decision noted above finds expression more precisely in Dhakeshwari Cotton Mills Pvt. Ltd. vs. CIT 26 ITR 1954 (SC) where it was held that In making assessment u/s 143(3), the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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