TMI Blog2019 (10) TMI 1073X X X X Extracts X X X X X X X X Extracts X X X X ..... the break-up of the items, the claim of the assessee cannot be disallowed. Only in case if it is found that the assessee either made a bogus claim or inflated the expenditure then to the extent of such bogus or inflated claim can be disallowed. Once the claim of expenditure is not found to be excessive or inflated then having regard to the fact that the actual work has been carried out at the site, the claim cannot be disallowed on minor irregularities or defects in the bills/invoices produced by the assessee. Hence the disallowance made by the authorities below is deleted. - ITA No. 363/JP/2017 - - - Dated:- 21-10-2019 - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri Manish Agarwal (CA) For the Revenue : Shri Raj Mehra (JCIT) ORDER PER VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order dated 16.03.2017 of ld. CIT (A)-1, Jaipur for the assessment year 2013-14. The assessee has raised the following grounds of appeal :- 1. On the facts and in the circumstances of the case the ld. CIT (A) has grossly er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e supplied any material to the assessee and there was no response and appearance on behalf of the assessee in the assessment proceedings. Therefore, the AO disallowed the claim of development expenditure to the tune of ₹ 71,20,843/- while passing the assessment order under section 144 of the IT Act. The assessee challenged the action of the AO before the ld. CIT (A) and filed various documents including lay out map of scheme being developed by the assessee, photographs of the site of project/scheme, copy of Work Completion Certificate issued by the Chartered Engineer, copy of 90B order with WCC, copy of 90A order with WCC and NOC of electric work by JVVNL etc. The ld. CIT (A) accepted the additional evidences filed by the assessee and called for a remand report from the AO. However, after remand report, the ld. CIT (A) has confirmed the disallowance/addition made by the AO on this account. 3. Before us, the ld. A/R of the assessee has submitted that the assessee submitted invoices/bills in respect of the material purchased from these parties which contain complete particulars of the suppliers. All these parties have accepted the fact of carrying out the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore opportunity to the assessee by calling for a remand report and after the remand report, the addition was sustained by the ld. CIT (A) based on the fact that the assessee has failed to produce these parties for verification. 5. We have considered the rival submissions as well as the relevant material on record. The AO has doubted the claim of the assessee and taken for verification on the fact that the development expenditure to the extent of ₹ 71,20,843/- was due but paid in next year. Thus the AO has accepted this fact that the payment was made by the assessee in the subsequent year. Even otherwise, before the assessment order was passed, the payment was already made by the assessee. The AO conducted the enquiry from these parties by calling the information under section 133(6) of the Act. Some of the parties have not responded to the notice issued under section 133(6), however, the others denied to have supplied any material to the assessee. Consequently the AO has disallowed the claim by passing an ex parte order. The details of the parties in respect of which the AO has disallowed the expenditure are as under :- S.No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,200 Greet, Bricks stone 10 Total amount 71,20,843 The assesseee also explained the fact that the payment was made through its Director Shri Umesh Gupta but has rejected the claim on the ground that the payment made by the Director is not acceptable and allowable under the provisions of the Act. Further, the assessee produced the lay out plan of the project, photographs of the site showing the work of development, Work Completion Certificate issued by the Chartered Engineer regarding the work completed by the assessee as well as the development work towards road. The details of the work carried out by the assessee during the year under consideration has been given in the report of the Chartered Engineer which includes road work, sewerage line work, water supply work, electricity work etc. The assessee also filed the NOC of the electric work by JVVNL. Once these documentary evidences have been filed by the assessee regarding the actual work carried out at site and the AO ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven to M/s. Kundhaliya Construction Co. and M/s. Silvertech Engineer. 6. The assessee claimed expenses on account of electricity work of ₹ 20 lacs comprises of ₹ 10 lacs each from M/s. Kundhaliya Construction Co. and M/s. Silvertech Engineer. Since the assessee did not produce the requisite evidence and details during the assessment proceedings, therefore, the AO made disallowance of 50% of the said expenditure. On appeal, the ld. CIT (A) called for a remand report and after the remand report of the AO wherein the AO has reiterated its stand of disallowance, has confirmed the said disallowance of ₹ 10 lacs being 50% of the claim of ₹ 20 lacs. 7. Before us, the ld. A/R of the assessee has submitted that the said expenditure was incurred relating to the development work at residential project Khushi Sansar . The material was purchased from the assessee from M/s. Silvertech Engineer to be utilized in transmission of electricity such as conductors, cables, PCC poles, transmission lines, insulators and other structures etc. The assessee produced the invoices/bills in respect of the said expenditure. Therefore, the expenditure w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re are some irregularities in the bills and vouchers produced by the assessee in not giving the break-up of the items, the claim of the assessee cannot be disallowed. Only in case if it is found that the assessee either made a bogus claim or inflated the expenditure then to the extent of such bogus or inflated claim can be disallowed. Once the claim of expenditure is not found to be excessive or inflated then having regard to the fact that the actual work has been carried out at the site, the claim cannot be disallowed on minor irregularities or defects in the bills/invoices produced by the assessee. Hence the disallowance made by the authorities below is deleted. Ground No. 3 is regarding addition on account of discrepancy in amount of advance by the assessee to M/s. Arihant Shivenk Infra Projects Ltd. 10. At the time of hearing, the ld. A/R of the assessee has stated at bar that the assessee does not press ground no. 3 of the appeal and the same may be dismissed as not pressed. The ld. D/R has no objection if the ground no. 3 of the assessee s appeal is dismissed as not pressed. Accordingly, the ground no. 3 of the assessee s appeal is dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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