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TMI Blog2011 (1) TMI 1168X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,750/- to Rs.5,30,750/- on account of disallowance of entertainment expense even though the assessee had failed to produce any supporting evidence/papers in respect of the expenses during assessment?" "Whether on the facts and circumstances of the case, the Appellate Tribunal is right in law and on facts in upholding the findings of the CIT(A), restricting the addition of Rs.87,46,548/- to Rs.1,22,040/- made by the Assessing Officer in respect of balances for which no confirmation/details/evidences were furnished by the assessee?' "Whether on the facts and circumstances of the case, the Appellate Tribunal is right in law and on facts in upholding the findings of the CIT(A), who had held that in respect of various irregulari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) in his order dated 30th November, 2006 has recorded the following finding:- "4.5 I have heard the AO and carefully considered his observation as also comments on appellant's submission. I have also heard the AR of the appellant and considered the submission and rejoinder to the AO's comments made on behalf of the appellant. It is contended by the appellant that the AO's allegation that there are no vouchers for the expenses is not correct. In this connection the appellant has furnished the vouchers during the present proceedings for perusal. No doubt these vouchers are signed by supervisors, that apart, it cannot be said that the expenses are not vouched. It is also matter of fact that the appellants business of doing work at mid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not the case of the Assessing Officer that the expenditure claimed by the assessee was, in fact, not incurred at all. The expenditure was disallowed on the ground that the assessee was not required to spend the amount. The Commissioner (Appeals) was accordingly of the view that a businessman may incur an expenditure which he is under no legal obligation to make but if he does so as a measure of commercial expediency, it must be allowed under section 37 of the Act as legitimate business expenditure. However, considering the nature of expenditure, the Commissioner (Appeals) has restricted the disallowance to one-third. 6. The Tribunal in the impugned order has recorded that if the expenses are extended for the purpose of business o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lates to restriction of Rs.87,46,548/- to Rs.1,22,040/- in respect of balances for which no confirmation/details/evidences were furnished by the assessee. The business activity of the assessee is mainly labour oriented and various outside agencies are engaged to support the business. The assessee had submitted details of purchases, creditors, debtors etc. The Assessing Officer issued notices under section 133(6) of the Act to the said parties. Out of notices issued to 12 parties, five did not respond and the remaining merely confirmed the balances. The Assessing Officer called for details from the various suppliers for the genuineness of the transactions and made the addition as no details/confirmations were furnished in respect of 12 parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt were audited and the Assessing Officer had not pointed out any defect or discrepancy therein. However, in case of bill of J. H. Jamani, it was found that an amount of Rs.43,094/- had been accounted twice and in the case of Shree Balaji Explosive credit note of Rs.78,946 was not accounted for by the assessee, and accordingly, to the extent of Rs.1,22,040/- the addition was upheld whereas the remaining addition of Rs.86,24,508/- came to be deleted. In revenue's appeal, the Tribunal upheld the order made by Commissioner (Appeals). 9. As can be seen from the impugned order of the Tribunal, the Tribunal has noted that the business activity of the assessee was mainly labour oriented and various outside agencies were engaged to support ..... X X X X Extracts X X X X X X X X Extracts X X X X
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