9911796707
TMI Blog2015 (12) TMI 1542X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of Freight Expenses, Packing Expenses, Power & consumption Expenses, Machinery Expenses and Tools & Consumable Expenses to the tune of Rs. 1,85,76,401/- by holding that the AO had not made enquiries, whether the expenses were genuine or not or whether these were of capital or revenue in nature. 2. That on the facts and circumstances of the case and in law the Ld. CIT(A) erred in appreciating the fact that the AO had specifically by questionnaire asked the assessee to file bills/vouchers for various expenditure but the assessee failed to produce the same. Secondly, as the accounts were unaudited reliance could not be placed on book entries alone without examining supporting bills/voucher. 3. That on the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry repairs assessee submitted explanation about that it is day to day maintenance expenses , for tools and consumable expenses submission of the assessee was that these expenses are for tools and dies consumed on day to day basis and also incurred for maintenance of quality of the manufacturing. Ld AO not convinced with the explanation of assessee made disallowance of expenses on adhoc basis as under :- a. Freight expenses 20 % Rs. 45,86,126/- b. Packing expenses 13 % Rs. 20,36,214/- c. Power and consumption expenses Rs. 81,13,559/- d. Machinery expenses 20% Rs. 14,57,839/- e. Tools and Consumables 20 % Rs. 23,83,663/- 3. On Appeal, CIT (A) deleted the disallowance holding that disproportionate increase in expenses compared with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with evidence of payments depicted in ledger account and further all the expense are wholly and exclusively incurred for the purposes of the business no disallowance should have been made. He relied on several judgments of various courts supporting that ad hoc disallowance cannot be made. 7. We have carefully considered the rival contention as well as the orders of lower authorities. It is a fact that there is increase in various expenses of compared to previous year. Further there is also higher percentile increase than the increase in sales of the company. Ld AO has rightly made the queries on this front and obtained the explanation of the assessee. However after obtaining the explanation of the assessee, AO has nowhere given any reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluded on 18.12.2009 i.e. almost 14 months , this time period shows that AO has ample time to exercise all the power vested up on him by the Act and gather adequate evidence to make concrete disallowance, if at all any. The powers bestowed up on assessing officer are very wide and most effective which were used very sparsely in this case. Therefore there is no basis, except statistics, for making contested disallowance in the hands of assessee. In our view this is not sufficient to uphold disallowances. In this back drop, ad hoc disallowance made by AO cannot be sustained and CIT (A) has rightly deleted the same. Therefore we confirm the order of CIT (A) and dismiss the appeal of revenue. 8. The appeal of revenue is dismissed. Ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
