TMI Blog2022 (3) TMI 1065X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the Assessing officer that advances are not for business purposes are contrary to the facts on record. Balance sheet of the assessee company for FY 2013-14 as per which the shareholder fund and as such the appellant has sufficient non-interest bearing fund. Thus, the assessee has been found to be having enough own non-interest bearing fund. Hence, we hold that no disallowance is called for on account of loans and advances given is called for. Ad hoc disallowance of expenses - AO disallowing 10% of total expenses under the head brokerage and commission and while disallowing 10% of expenses under various heads (like packing material consumed, electricity water, equipment hire charges, communication expenses, freight forwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case was selected for scrutiny and the detailed questionnaire was issued requiring various information and explanation. All the information required by the Assessing officer has been duly filed during the course of assessment proceeding. The Assessing officer while passing the order made the addition of i) ₹ 6,12,285/- under the head interest on loans and advances ii) ₹ 10,15,875/- by disallowing expenses claimed under the head Brokerage and Commission expenses on ad hoc basis iii) ₹ 1,15,46,459/- by disallowing expenses claimed under the head other expenses on ad hoc basis iv) ₹ 56,83,585/- being 1/5th of the total advance received from customer on ad hoc basis v) ₹ 24,08,621/- being 1/10 of the other liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12,75,702 Balance with port authorities 5,95,605 Income Tax refund 2,98,747 Other (prepaid expenses) 1,33,53,983 4,80,44,633 5. From the perusal of the above schedule it can be observed that all the loans and advances are in the nature of Advance against material services, Security Deposits, MAT Credit, Balance with statutory/government Authority etc and are business advances and as such are related to business purposes. As such the observation made by the Assessing officer that advances are not for business purposes are contrary to the facts on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 9. However said observation made by the Assessing officer that the assessee has not provided the documentary evidence in respect of expenses is contrary to the facts on record. In this regard the assessee submitted all the documentary evidence with the submission filed during assessment proceedings. 10. The Ld. CIT(A) held that the disallowances are simply made on ad hoc basis without pointing out any defects in the books of the assessee or any other specific short coming. The expenses that are duly vouched and audited cannot be summarily disallowed. Such a disallowance cannot be sustained in absence of any valid basis. The disallowances are liable to be deleted. 11. In this regard the Co-ordinate Bench of Tribunal in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidering the facts of the present case on this issue and the orders of the authorities below, we find no infirmity in the order of CLP(A) because on the basis of general observations, without pointing out even a single specific defect in the vouchers or books of accounts, ad hoc disallowance made by Assessing Officer is not justifiable and the same was rightly deleted by CIT(A). Hence, on this issue, we decline to interfere in the order of learned CIT(A). Accordingly, issue No. 2 is decided in favour of the assessee. 13. Keeping in view the judgments quoted above and the fact that the disallowances were made on ad hoc basis, we decline to interfere with the order of the Ld. CIT(A). 14. In the result, the appeal of the Revenue is dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
