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TMI Blog2012 (5) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the case are that it is noted by the AO on page 8 para 3 of the assessment order that assessee had debited an amount of Rs.7,05,525/- under the head 'dead stock'. On perusal of ledger, it is seen that mostly furniture item have been debited in this account. The AO held that furniture items are fixed asset and expenses on these items is to be treated as capital expenditure. The AO issued letter on 22/12/2009 asking the assessee as the why the dead stock should not be treated as capital expenditure as these items are furniture and fixtures and should have been treated as fixed assets. 4. The AO further noted that no explanation whatsoever was furnished by the assessee despite opportunity provided during hearing dated 24/12/2009. The AO disallowed the same treating this as capital expenditure. The AO made an addition of Rs.705,525/- on this account. 5. The second issue is about deletion of disallowance of Rs.79,41,759/-. The facts regarding this issue are that it is noted by the AO in para 4 of assessment order that on perusal of details filed by the assessee, it is seen that the assessee has debited an amount of Rs.79,41,759/- under the head 'land and restorati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be submitted because of lack of time. The assessee also furnished a chart containing details of missing purchase bills of fixed assets and allowable depreciation on it, as per which, depreciation claimed by the assessee is of Rs.9,60,081/-. This was disallowed by the AO on the basis that the assessee failed to produce any evidence of purchase and put to use of the assets mentioned in assessee's reply. 8. Being aggrieved, the assessee carried the matter in appeal on all these issues before ld. CIT(A). The ld. CIT(A) deleted all these disallowances and now the Revenue is in appeal before us. 9. It is submitted by the ld. DR that the AO has discussed that with regard to all the four items of disallowances, no explanation/evidences were furnished before the AO and hence, the disallowances were rightly made by the AO. He also submitted that even if some evidences were furnished before ld. CIT(A), the same amount to additional evidences which should not be admitted because sufficient opportunity was provided by the AO. He submitted that ld. CIT(A) has not obtained remand report and hence deletion of disallowances is not justified and hence, the order of the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, we find that AO has treated the expenditure incurred of Rs.79,41,759/- by the assessee on land restoration as capital expenses. We find that the disallowance was made by the AO on the basis that after issue of show cause notice by him no reply was submitted by the assessee before AO as to why these expenses incurred by the assessee on land restoration be not treated as capital expenditure. This shows that no detail whatsoever or explanation was furnished before the AO in this regard. We also find that assessee has submitted the details before ld. CIT(A) and the issue was decided by simply accepting the argument of the ld. AR of the assessee without examining the details and evidence and without obtaining any remand report from the AO. We also find that this was an argument before the ld. CIT(A) that the expenses are incurred by the assessee for land leveling which were excavated in the course of laying pipelines. We also find that the profit and loss account of the assessee is appearing on page No.95 of the Paper Book, as per which, assessee has shown income from operations of Rs.635.159 lacs and has shown increase/(decrease) in closing stock of Rs.13.047 lacs. The details of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) has examined the evidence in this regard and it is also seen that he has not obtained remand report of AO on each evidence filed before him. The ld. CIT(A) has reproduced the submission made by the assessee before him on pages 10 and 11 of his order and in this submission also, contentions are raised but there is no whisper regarding the evidence in respect of these contentions. Merely making this contention that stamp duty expenses were incurred for obtaining loan cannot be accepted unless the same is supported by some evidence. Since there is no whisper in the order of ld. CIT(A) or in the submission made before ld. CIT(A) about evidence and no reply or evidence was produced before the AO, the disallowance made by the AO is justified and the order of ld. CIT(A) for deleting the addition is not sustainable. We, therefore, reverse the order of ld. CIT(A) on this issue and restore that of the AO. This ground of Revenue is allowed. 14. Regarding ground no.4, we find that the depreciation was disallowed for the reasons that the assessee could not produce evidence regarding the purchase of assets or evidence in respect of putting into use of the assets. The ld. CIT(A) has d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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