TMI Blog2022 (6) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... per opportunity to the assessee as per the evidence placed on record within a reasonable time and allow the interest to that extent of evidence placed on record and the amount of interest claimed. Therefore, the ground no. 1 raised by the assessee is allowed. Addition on account of Office Expenses, Staff Welfare and Vehicle Expenses on presumptive basis - assessee has maintained proper books of account on the basis mercantile system of book keeping which is duly approved as per provision of I.T Act 1961. The books of account of the assessee are duly audited by qualified chartered accountant - HELD THAT:- As following judicial precedent DHAKESWARI COTTON MILLS LIMITED [ 1954 (10) TMI 12 - SUPREME COURT] the addition made by the Assessing Officer is hereby deleted as the Assessing Officer and ld. CIT(A) could not find any defect or various claims made by the assessee, ad-hoc disallowance without pointing out any specific defect not sustainable. Therefore, the addition made by the lower authorities deleted and this Ground No. 2 raised by the assessee is hereby allowed - ITA No. 259/BIL/2016 - - - Dated:- 8-6-2022 - Shri Ravish Sood, Judicial Member And Shri Rathod Kamlesh Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejected and accordingly interest amounting to Rs. 1,72,973/- disallowed. 3.1 The assessing officer has also added a sum of Rs. 75,000/- wherein he has observed as under: 5. On scrutiny of different heads of expenses, it has been found that expenses under the heads Office Expenses, Staff Welfare Vehicle Expenses have been mostly incurred in cash and supported by internal vouchers. Labour payments have also been made in cash and also not fully open to verification. As payment of labour is obvious and mandatory component of contract business therefore a sum of Rs. 50,000/- is disallowed from this head. The expenses under the other heads are tabulated as under:- Head - Amount 1. Office Expenses - Rs. 1,06,930/- 2. Staff Welfare - Rs. 2,97,600/- 3. Vehicle Expenses - Rs. 1,10,095/- Total - Rs. 5,14,625/- Following the same corollary and with a view to tapping th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rusal of all case laws find the AO very reasonable in disallowance. Thus, Rs. 50,000/- disallowed by the AO for the reasons cited by the AO in his assessment order are hereby confirmed. Hence, this ground of appeal is dismissed. 5. During the course of hearing before us as regards the Ground no 1 the ld. AR of the assessee submitted that the assessee firm has given postdated cheque to the financer, hence deduction of TDS is not practically possible. Further the assessee has submitted that on amendment made by the Finance Act, 2012 in section 40(a)(ia) provides for allowance of expenditure where person responsible for deduction of tax is not treated as assessee in default subject of fulfillment of the few conditions. He further submitted that when proviso in a section is inserted to remedy unintended consequences and to make the section workable, the proviso which supplies and obvious omission therein is required to be read retrospectively in operation particularly to give effect to the section as whole in strict construction leads to a result not intended to be sub served by the object of the legislation, and if another construction is possible apart from the literal in construc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rincipal of natural justice and oblige. 6. Since, the assessee has moved an application under rule 29B of the ITAT Rules, 1963 praying to permit additional evidence as the assessee has to acquire it from the payee on which the tax has not been deducted by the assessee. The assessee also has to acquire the required certificate from the Chartered Accountant in the prescribed form, from the payee. The assessee further submitted that as they were defaulted in making payment of EMI, due to financial crunch, they were unable to obtain required certificate from the payee s chartered accountant which is to be certified from the books of the payee NBFC in the prescribed form. This being the reason, they were prevented with sufficient cause in not submitting the certificate earlier and the Tribunal being final fact-finding authority requested to allow the additional evidence in the interest of justice which were not presented before the lower authorities to justify and claim the alternative plea of remedy available on account of default in making the TDS on payment of interest made by them to NBFC. 7. Based on these set of facts and plausible cause adduced by the assessee prayed in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of book keeping which is duly approved as per provision of I.T Act 1961. The books of account of the assessee are duly audited by qualified chartered accountant. 2.2 The above impugned adhoc disallowance made estimations and on presumptions are unsustainable on facts and in law because the declared results accepted by the AO were on the basis of audited books of account and no suppression in sales or inflation in purchases were detected much less was any serious discrepancy pointed out in the method of accounting consistently being employed by the assessee. There was no finding of fact to the effect that the method employed was such that correct profits could not be deduced there from. No evidence whatsoever was brought on record to prove that the assessee, during the relevant previous years, had earned more than that returned as per audited books of account. Unless these are conclusively proved against the assessee, any estimated enhancement to the income declared on the basis of audited books, was unsustainable on facts and in law. Since the declared NP was accepted as reasonable, it was not permissible for the AO to go back to the expenses claimed under P/L A/c. to make est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material purchased and out of earth transporting charges, held that since the expenses under these heads were incurred for purposes of business, respectfully following the decision of the SC in Dhakeshwari Cotton Mills Ltd. vs. CIT 26 ITR 775 (SC) it was held that such Adhoc disallowances made on the basis of guess work were not sustainable. Hence the A.O. was directed to delete such adhoc disallowances. 2.4 Your honour the jurisdictional hon'ble ITAT Bench of Raipur, in Assistant CIT Vs. Ind Synergy Ltd. (2016) 20 ITJ 108 it was held that the impugned adhoc disallowances on ground that even on verification of bills and vouchers, no specific instance was mentioned by the AO in support of the said disallowances the disallowances are deleted. 2.5 Your honour the jurisdictional hon'ble ITAT Bench of Raipur, in Assistant CIT Vs. Shri Sai Vihar (2016) 28 ITJ 158 it was held that the it is settled law that the Adhoc disallowance without specifying any specific defects the addition cannot be made on the basis of surmises and conjectures. The Hon'ble ITAT has upheld the order of CIT (A) and justified the deletion made by CIT (A). 2.6 Your honour, the jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee and lump sum disallowances made by the AO was deleted. 13. Per contra on this issue the ld. DR has relied upon the finding of the lower authorities and reiterated that the based on the findings of the AO the addition should sustained and has not filed any contrary decision against the submission made by the ld. AR of the assessee. 14. Based on the argument of both the side and submission and case law relied upon by the ld. AR of the assessee we respectfully following the Co-ordinate Bench decision relied upon the ld. AR of the assessee and the fact being identical we considered the plea of the assessee. Therefore, the ratio laid down by the Co-ordinate Bench and the following judicial precedent the addition of Rs. 75,000/- made by the Assessing Officer is hereby deleted as the Assessing Officer and ld. CIT(A) could not find any defect or various claims made by the assessee, ad-hoc disallowance without pointing out any specific defect not sustainable. Therefore, the addition made by the lower authorities deleted and this Ground No. 2 raised by the assessee is hereby allowed. 15. In the result, the appeal of the assessee is allowed. Order pronounced in open ..... X X X X Extracts X X X X X X X X Extracts X X X X
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