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2016 (4) TMI 1089 - ITAT VISAKHAPATNAM

2016 (4) TMI 1089 - ITAT VISAKHAPATNAM - TMI - Disallowance of carriage Inward expenditure - Held that:- Assessing Officer was not correct in disallowing 10% of such expenditure. We have gone through the submissions of the assessee and orders of the authorities below. The Assessing Officer disallowed the expenditure on adhoc basis without pointing out any specific instances, where supporting bills are not available. On perusal of financial statement filed by the assessee, we find that the expend .....

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ance made by the Assessing Officer. The Ld. D.R. on the other hand did not object for the proposal. Therefore, to meet the ends of justice, we direct the Assessing Officer to disallow 5% of carriage inward expenditure. Accordingly, we direct the Assessing Officer to disallow 5% of expenditure under the head carriage inwards.

Disallowance of depreciation on motor cycles - Held that:- During the course of assessment proceedings, the assessee could not produce bills in support of the cap .....

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additions made by the Assessing Officer. We do not see any reason to interfere with the order passed by the CIT(A) - I.T.A.No.332/Vizag/2013 - Dated:- 18-3-2016 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Appellant by : Shri C. Subrahmanyam, AR For The Respondent : Shri M.N. Murthy Naik, DR ORDER PER G. MANJUNATHA, Accountant Member: This appeal filed by the assessee is directed against the order of CIT(A)-11, Mumbai, Camp: Visakhapatnam dated 15.3.2013 .....

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accordingly, notices u/s 143(2) & 142(1) of the Act were issued. In response to the notices, the authorized representative of the assessee appeared from time to time and furnished books of accounts and other information called for. During the course of assessment proceedings, the Assessing Officer noticed that the assessee has claimed an amount of Rs. 42,30,354/- towards freight and carriage outwards. On verification of the vouchers furnished in support of the claim, it was noticed that all .....

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to whom payments are made, the Assessing Officer disallowed 10% of expenditure i.e. Rs. 4,23,035/- and added back to the total income. Similarly, during the course of assessment proceedings, the assessee has been asked to produce bills in support of additions to the fixed assets. In response to notice, the assessee has furnished bills and invoices for additions made to all the fixed assets, except in respect of two motor cycles valued at Rs. 86,000/-. Therefore, the Assessing Officer has disallo .....

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nsport goods to various destinations and paid lorry hire charges. It has produced way bills, bills & vouchers duly reconciling the lorry numbers, destination, quantity transported to prove the genuineness of the payments and also explained the facts and circumstances under which such payments are made. The Assessing Officer without appreciating the proper facts made adhoc disallowance, which is not correct. Similarly, as regards the depreciation on motor cycles, the assessee submitted that i .....

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penses. The CIT(A) held that the assessee could not produce proper details with regard to the expenditure claimed under carriage inwards, such as way bills and also names and address of the payees. In absence of such details, the genuineness of the expenditure and payment is in doubtful. Therefore, confirmed the additions made by the Assessing Officer. As regards the disallowance on depreciation, the CIT(A) held that the assessee admitted that he could not produce evidences before the Assessing .....

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t considering the supporting evidences filed during the course of assessment. The Authorised Representative further submitted that the assessee is into the business of trading in fertilizers, which requires huge number of vehicles for transportation of goods. The assessee has hired Lorries for transportation of goods from one place to another place and paid the hire charges and furnished supporting evidences in the form of way bills and other details. The assessee has proved the expenditure by p .....

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) 63 SOT 314. The Authorised Representative further submitted that 10% adhoc disallowance made by the Assessing Officer is quite high, therefore, requested to scale down the disallowance to 5%. On the other hand, the Ld. D.R. strongly supporting the order of CIT(A), agreed for 5% disallowance of expenditure. 5. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The A.O. has disallowed 10% carriage inward expenditure. Th .....

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w. The Assessing Officer disallowed the expenditure on adhoc basis without pointing out any specific instances, where supporting bills are not available. On perusal of financial statement filed by the assessee, we find that the expenditure claimed is very less when compared to related turnover. The assessee is into the business of trading in fertilizers which requires lot of carriage inward expenditure, as the goods are bulky and which needs to be transported to various places. Considering the n .....

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