TMI Blog2017 (5) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of hearing, submitted that he did not press the ground challenging the additions towards site expenses, advertisement and architect fees. Therefore, the ground raised by the assessee, challenging these two additions has been dismissed as not pressed. Disallowance of depreciation of Ritz car and interest on Ritz car loan - Held that: - Though the Act does not prescribe ownership of asset in the name of the assessee for claiming depreciation, assessee failed to prove the use of such vehicle in the business of the assessee. Therefore, we are of the view that the assessee failed to prove the use of vehicle in the business of the assessee, which is mandatory for claiming depreciation on any assets. Similarly, in respect of interest on vehicle loan, for the similar reasons, the A.O. has disallowed interest paid on vehicle loan - disallowance upheld. Addition towards negative cash balance in the cash book for the assessment year 2011-12 - Held that: - the assessee has filed a chart showing negative cash balances on various dates. On perusal of the chart filed by the assessee, we find that the highest negative cash balance appeared on 13th August, 2010. Once the peak negative ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed elaborate written submissions and argued that the A.O. was erred in disallowing certain expenditure on the ground that the assessee has failed to produce bills and vouchers, despite the fact that the assessee has furnished books of accounts and other bills and vouchers along with ledger extract to prove the genuineness of expenditure. The CIT(A) after considering the relevant explanations of the assessee partly allowed appeal filed by the assessee for the assessment year 2008-09 to 2011-12 and allowed relief towards disallowance of certain expenditure and set aside the issue to the file of the A.O. for verification of expenditure. However, confirmed additions towards disallowance of donations, disallowance of sales tax, disallowance of payment to auditors u/s 40(a)(ia) of the Act, disallowance of office rent, disallowance of service tax and house tax, disallowance of sub contract payment, disallowance of unexplained cash credits, disallowance of bonus, disallowance of purchases, disallowance of interest claimed on vehicle loan and depreciation on vehicle, disallowance of advertisement and architect fee, disallowance of site expenses and additions towards negative cash balance in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, made adhoc disallowance of expenditure under the head conveyance and travelling charges, sales commission and business promotion expenses. 7. It is the contention of the assessee that it has produced bills and vouchers in support of all expenses before the A.O. The assessee further contended that the A.O. has disallowed the expenditure for want of proper supporting documents including wage register/muster roll for labour charges, but the fact remains that the assessee has paid labour charges to the maestries appointed for this purpose, in turn they have distributed to the labourers on daily basis, therefore, the assessee has not maintained any wage register/must roll. In so far as disallowance of vehicle maintenance expenses and business promotion, these expenditures are incurred on day to day business for maintenance of vehicles owned by the company for which the assessee has furnished bills and vouchers to prove the genuineness of expenditure. Similarly, the assessee has paid commission for which it has produced necessary supporting bills. The A.O. ignoring all evidences filed by the assessee, disallowed expenditure on suspicious and surmises basis. 8. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,000/- which was disallowed by the A.O. u/s 40(a)(ia) of the Act, for failure to deduct TDS u/s 194C of the Act. The assessee further stated that the expenditure incurred towards payment of sub contractors has been paid within the end of the financial year, therefore, in view of the special bench decision of ITAT, Visakhapatnam in the case of Merylin Shipping Transporters, Vs. ACIT, no disallowance can be made, if expenditure is paid on or before 31st March of the financial year. The assessee has made a similar argument in case of sales commission. The assessee further contended that out of total disallowance of sales commission, a sum of ₹ 8.6 lakhs was disallowed u/s 40(a)(ia) of the Act for failure to deduct TDS. Since, the commission has been paid on or before 31st March of the relevant assessment year, in view of the special bench decision of ITAT, Visakhapatnam in the case of Merylin Shipping and Transporters, no disallowance can be done if the expenditure has been paid within the end of the financial year. Though, the assessee has made a claim with regard to the paid and payable failed to furnish necessary evidences to justify its case. Therefore, we are of the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iation, assessee failed to prove the use of such vehicle in the business of the assessee. Therefore, we are of the view that the assessee failed to prove the use of vehicle in the business of the assessee, which is mandatory for claiming depreciation on any assets. Similarly, in respect of interest on vehicle loan, for the similar reasons, the A.O. has disallowed interest paid on vehicle loan. Since, we have already hold that the assessee has failed to prove the use of vehicle in the business of the assessee, we are of the view that for the similar reasons, the assessee is not eligible for deductions towards interest paid on vehicle loan. Therefore, we uphold the addition made by the A.O. towards disallowance of depreciation on Ritz car and interest on Ritz car loan. 14. The next issue that came up for our consideration is addition towards negative cash balance in the cash book for the assessment year 2011-12. The A.O. noted that during the survey operation, a negative cash balance of ₹ 33,55,093/- was found for which the assessee has not produced any evidences. Therefore, the A.O. took the view that the assessee has made expenditure without having sufficient source in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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