TMI Blog2016 (6) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... e same has been received in the current assessment year. Merely because the assessee has received the bill in the current assessment year the same cannot be disallowed for the reason that it is an ongoing pendency in the legal profession that a memo of appeal is raced by the professional consultant for any work carried out by them during the year. Such situations cannot be categorized and disallowed under prior period expenses. Since the bills have been received in the year under consideration the liability for payment of these expenses also gets crystallized during the year under consideration. - Decided in favour of assessee Addition in respect of unaccounted sale - Held that:- AO proceeded to make addition on the sale amount received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stification of the claim. (ii) That the disallowance is on mechanical basis without proper appreciation of facts and recording of proper finding. 2. (i) That on the facts and circumstances of the case, the CIT(A) was not justified in sustaining addition of ₹ 1,56,24,699/- in respect of alleged unaccounted sale without their being any evidence or material in respect of the same. (ii) That in this case, survey was carried out and on the basis of evidence and material, the unaccounted sale was duly subjected to tax and as such their cannot be any presumption about any further sale. (iii) That addition is merely on the basis of presumption and surmises and in total disregard to facts and legal principles. (iv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aggrieved by the order of the Ld. that you the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) confirmed the additions made by the Ld.AO. 4. Aggrieved by the order of the Ld. (A), the assessee is in appeal before us now. 4.1. Ground No.1 : This ground pertains to the disallowance of the legal expenses amounting to ₹ 6,91,171/- the ld.AR submitted that the legal expenses amounting to ₹ 4,44,171/- in respect of Peregrine Guarding Ltd., the assessee had duly submitted the bills and vouchers in respect of the same before the Ld. CIT (A) as well as the Ld.AO which has been enclosed at pages 33 to 35 of the paper book. The ld.AR submitted that since the bills have been received by the assessee company durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al advisers from advocates and consultants. Considering the kind of activity carried on by the assessee there is a need for day-to-day consultation with advocates and consultants in respect of the sale of plant and machinery. The authorities below have contended that certain bills pertains the previous year relevant to the assessment year under consideration, the same has been received in the current assessment year. Merely because the assessee has received the bill in the current assessment year the same cannot be disallowed for the reason that it is an ongoing pendency in the legal profession that a memo of appeal is raced by the professional consultant for any work carried out by them during the year. Such situations cannot be categorize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51 ITR 561. 8. We have produced the orders of the authorities below as well as the documents filed by the assessee in the paper book, and the judgments relied upon both the sides. 8.1. On consideration of the facts we find that the addition has been made by the Ld.AO on the basis of surmises and guess work. The reasoning given by the Ld.AO for making such addition is entirely on guess work and not based on any cogent material obtained during the course of search. It is well settled legal position, in respect of income tax assessment proceedings that, although strict rules of evidence act do not apply to the income tax proceedings, assessment cannot be made on the basis of imagination and guess work. The assessing officer has estimated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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