TMI Blog2017 (3) TMI 1228X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee in comparison to earlier years vis-à-vis to the turnover of assessee. It is also important to note that there was a massive fire broke out in assessee’s office premises as claimed by assessee and that may be one of the reasons for non-production of the supporting evidence before the authorities below. However none of the Authorities Below have not commented to this aspect. Since there is no finding of the Authorities Below on this aspect whether the assessee failed to give satisfactory reply due to fire break out in the office of assessee and if that is not the case then it was the duty of assessee to justify all the expenses claimed in its profit and loss account. However, we are not interested in sending back the matter to the AO to avoid further litigation. Therefore, in the interest of justice, we restrict the disallowances to the extent of 50% for the year under consideration, as all the vouchers were not produced for verification during the appellate proceedings. AO is directed accordingly. Thus, this ground of assessee’s appeal is allowed. Addition on account of investment in tenanted property out of undisclosed income - Held that:- Assessee has admitted be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 1,25,30,287/- towards repair expense on the rented premises. The assessee without prejudice to above also submitted to treat the said repair expense as capital in nature and prayed for the allowance of depreciation thereon. The assessee has incurred an expense of ₹1,25,30,288/- on repair maintenance for its go-down taken on lease. The details of such expenses are reproduced below:- Sl. No. Godown at Amount w/off during the year INR Name of landlord Monthly rent INR 1 Ankurhati (Bombay Road) WB 255990 Chandu Somani 75000 2 Salap (Bombay Road) WB 3474066 Somani Services P. Ltd. 25000 3 M.D. Road, Kolkata 6496321 Inland Couriers P. Ltd 10000 Total 12530287 The assessee has claimed such expenditure in entirety in the form of depreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said expenses can be treated as capital in nature and the depreciation thereon can be allowed. The ld AR in support of his contention has also submitted that the issue is already covered by the order of Hon ble ITAT in the assessee s own case (supra). However, on perusal of the aforesaid ITAT order we find that there was no dispute about the genuineness of the expenditure but in the instant case the assessee failed to establish the genuineness of the expenditure. Therefore, the order of the Hon ble ITAT is distinguishable as the facts of both the cases are different. The question to treat the current repair as capital expenditure arises only when the assessee establishes the genuineness of the expenses. As in the case before us the assessee failed to furnish the necessary details in support of its claim before the lower authorities, therefore the plea for depreciation cannot be entertained. However, now the ld AR has submitted the list of expenses of the current repair expenses along with the bank statement for consideration. In the aforesaid facts and circumstances of the case, we are of the view that first the genuineness of the expenses should be established. For that pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10-11 42284.22 190.67 Nil 13.57 Nil 183.53 Nil 11-12 49310.97 169.72 1.50 16.00 0.50 147.98 1.00 On the other hand, Ld. DR vehemently supported the order of Authorities Below. 12. We have heard the rival contentions of both the parties and perused the materials available on record. The issue in the present case relates to the disallowance made by the Authorities Below on account of non-production of supporting evidence. Therefore, disallowances were made on ad hoc basis. It is the duty of the assessee to submit the documents in support of the expenditure claimed in profit and loss account. In the absence of such documents, the authenticity of the expenses cannot be established. Therefore the disallowances are warranted. However, before making the disallowances it should be based on some reasonable basis. To form the reasonable basis, it is imperative to refer the historical data of the assessee and to refer the books of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bout the source of investment the assessee submitted that the amount has been spent from the regular source of the business which is duly recorded in the books of accounts. However, the AO observed that the necessary supporting documents were not available with the assessee. Therefore the AO treated the same as undisclosed income and added to the total income of the assessee. 16. Aggrieved, assessee preferred an appeal before Ld. CIT(A). The assessee before Ld. CIT(A) submitted the expenditure on repair maintenance was representing the current repairs and it was duly accounted for in the books of account and tax audit report. The AO has found no defect in the books of account while framing assessment proceedings and Ld. CIT(A) after considering the submission of assessee has deleted the addition made by the AO by observing as under:- I have perused the assessment order and copy of the tax audit report produced in course of the appellant proceedings. I find that sum of ₹ 125.30 lakhs is reflected in schedule D Fixed Assets to the tax audit report under the head Development of Tenanted Property . This fact has also been acknowledged by the AO in his assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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