TMI Blog2015 (12) TMI 1542X X X X Extracts X X X X X X X X Extracts X X X X ..... open floodgates of information for the AO to determine whether expenditure incurred by assessee are wholly and exclusively for the business or not. But no such efforts were made. Therefore statement of AO that there is no documentary evidence is produced by assessee before him is a hollow statement. Further the assessment proceedings started with the first notice u/s 143(2) on 18.09.2008 and assessment continued and concluded 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 spars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouchers 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 the case and in law the Ld. CIT(A) erred in ignoring the fact that the assessee had not justified the genuineness of expenses incurred on the above mentioned heads during the course of assessment proceedings. 4. That on the facts and circumstances of the case and in law the Ld. CTI(A) erred in ignoring the fact that the AO had made the additions by specifically comparing the percentage increase in expenses visavis increase in sales. 2. The facts in brief of the case are that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 126/- b. Packing expenses 13 % ₹ 20,36,214/- c. Power and consumption expenses ₹ 81,13,559/- d. Machinery expenses 20% ₹ 14,57,839/- e. Tools and Consumables 20 % ₹ 23,83,663/- 3. On Appeal, CIT (A) deleted the disallowance holding that disproportionate increase in expenses compared with sales is no ground for disallowance of expenses when complete details are furnished. Regarding power expenses CIT (A) deleted because assessee has produced the high value bill of power and also the ledger account of such expenses. Hence revenue is in appeal before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oc 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 that why the explanation submitted by the assessee is not acceptable to him. Had this explanation was not acceptable to him, he should have made a detailed inquiry, but AO adopted the easy way out. For increase in expenses assessee has submitted the cop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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