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TMI Blog2011 (9) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... , which was paid towards refund of the sales tax? 3. It was also submitted by the learned counsel that in the facts and circumstances of the case, the Tribunal was not justified in deleting disallowance of Rs. 2,52,189/- on account of vehicle repair expenses without any material. 4. Learned counsel appearing on behalf of appellant has submitted that deleting the disallowance on account of repair and maintenance was not called for considering the documents on record. Net profit rate could not have been made the basis to delete the disallowance made on account of repair and maintenance on the aforesaid amount. 5. With respect to the submission deleting disallowance on repair and maintenance raised by the learned counsel, the matter has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant had tried to "unduly inflate repair and maintenance expenses". This decision, in my considered view, is nothing more than a conjecture or a surmise. The Assessing Officer ignored the fact that NP at 3.21%, on a substantially higher turnover of this year, was higher than NP of 2.95% in the immediate preceding year. Without any material evidence to support his decision, he made the ad hoc and arbitrary disallowance of the huge amount of Rs. 27.85 lacs, almost 74% of the total claim under this head of Rs. 37.85 lacs and quite unmindful of the fact that disallowance made by him would result in the absurdly high NP of 16.23%. 8. The aforesaid finding has been affirmed by the ITAT in its order. ITAT has also referred to the decision of G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure is determined by accrual and not on so-called actual basis. By letter dated 12.01.10, the appellant submitted before me that "as per past practice the assessee had claimed expenses towards deduction of sales tax in the year of deduction by the awarder of contracts and the sales tax refund if any granted by sales tax authorities is taken as income in the year of grant of refund. He empahsised that this practice was consistently followed". 11. The finding has been affirmed by ITAT also considering the tax effect in circular issued under Section 268A of Income Tax Act, we are not inclined to make interference on aforesaid aspect. 12. Coming to third question raised by the learned counsel appearing on behalf of appellant with re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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