9911796707
TMI Blog2024 (11) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... r the year under consideration on 13.11.2014, declaring a total income of Rs. 10,00,590/-. The case of the assessee was selected for scrutiny under CASS. During the course of assessment proceedings, the Assessing Officer (AO), on examination of the books of account, bills and vouchers of the assessee, noticed that the assessee had debited a sum of Rs. 35,70,711/- as expenses under the head 'wages'. The AO observed that these expenses were in cash and were supported by only handmade vouchers and further muster rolls & attendance registers had not been maintained and that only labour payment register had been maintained by the assessee, and thus, the expenses under the head 'wages' were not open for verification. He, therefore, disallowed 5% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not accepting the claimed expenses that are based on books of account at the end of the year and has further ignored that the book results shown by the Assessee are much progressive in comparison to the preceding year. Even from the reading of Assessment Order it is evident that the appellant had produced vouchers towards the expenses claimed which were however not fully accepted by the Assessing officer on the ground that the same were "unverifiable self-made voucher". C. Because the Commissioner of Income Tax (Appeal) has failed to appreciate that it is well settled law that the Assessing Officer is required to consider the prevailing circumstances and history of the assess before rejecting books of accounts which has not been done by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid by cheque and therefore can be easily verified. I. Because the learned Commissioner of Income Tax (Appeals) has upheld the disallowance of Rs. 6,64,165/- towards Repair to Building Expenses on the ground that the Assessee did not file any evidence so at to claim it as revenue expenditure and merely filed ledged copy of account which does not prove the same. J. Because the learned Assessing Officer has disallowed 10% of different heads i.e. Advertisement & Publicity Expenses, Business promotion Expenses, Commission on Sales Expenses, Car Running Expenses, Delivery Van Running and Maintenance Expenses, Misc. Expenses, Service and Maintenance expenses, Telephone Expenses, Repairs to Building Expenses and Vehicle Running and Maintenanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss Promotion Expenses', it was submitted that the total expenditure claimed during the year was to the tune of Rs. 3,42,068/- being 0.13% of the total turnover. It was submitted that the reason for increase in expenditure on this account was due to the fact that three new branches of the assessee-firm had been opened during the year and further, during Deepawali season, the assessee had introduced a business promotion scheme, under which any customer, making a purchase of Rs. 7,000/- or above, would qualify to participate in Lucky Draw Scheme to win a Hyundai Eon Car, worth Rs. 2.65 lakhs. It was submitted that the business promotion scheme was a success inasmuch as the same is evidenced by increased turnover during the year under considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3,31,884/- under the head "Service and Maintenance Expenses", the Ld. A.R. submitted that these expenses were incurred towards installation of various appliances purchased by the customers from various showrooms of the assessee. It was submitted that during the year, the assessee had incurred an amount of Rs. 24,43,201/- under this head and had received reimbursement of Rs. 21,11,317/- from its customers/manufacturers and the balance amount of Rs. 3,31,884/- had been claimed as expenditure having been incurred by the assessee. The Ld. A.R. submitted that in the preceding year also, this type of expenditure had been allowed in full and that the Ld. First Appellate Authority had erred in upholding this disallowance without considering the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade on an ad-hoc basis by the AO without pointing out any specific instance with respect to any of the expenses being disallowed. I am in agreement with the contention of the Ld. A.R. that ad-hoc disallowances, without pointing out any specific instance and for the general reason of covering any possible revenue leakage, cannot be upheld. There have been innumerable orders of this Tribunal where such adhoc disallowances were held to be bad in law. The assessee cannot be put to pay increased tax demand only on account of presumption that there could have been possible revenue leakage, especially when the assessee has duly offered explanations regarding each and every expenditure under dispute. In my considered view, both the lower authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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