9911796707
TMI Blog2012 (8) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee was very much justified in engaging his own family members to discharge the various duties, who was trustworthy compared to the outsiders - amount of expenditure incurred on sales vis-à-vis total turnover of business and nature of business activities of assessee no infirmity in the order of CIT(A) for deleting the disallowance - in favour of assessee. Disallowance of rent payment - CIT(A)restricted THE disallowance to the extent of Rs. 11,500/- by observing that rent to the extent of Rs. 1,80,480/- was reasonable taking the rent at Rs. 2/- per sq.ft., which was also allowed in the assessment year 2001-02, there is no infirmity in the order of CIT(A) for deleting the disallowance on account of rent - partly in favour of assessee. Dis allowance of courier expenses - Dis allowance was deleted by the CIT(A) by observing that there was huge turnover of the assessee and such disallowance was not warranted - in favour of assessee. Dis allowance of stationery expenses - AO disallowed expenses without assigning any reason - no interference in CIT(A)'s order required - in favour of assessee. Dis allowance of 50% of “Misc. Expenses” - Considering over all turnover of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion pointed out that books of accounts and other related documents which were written up to 05.01.2003 were impounded under survey proceedings on 06.01.2003 and were in the possession of the department. The AO while disallowing nearly 70% of total amount claimed under this head has not cared to identify to what extent bills and vouchers were produced and noted by him. He has altogether ignored the impounded books of accounts lying in the possession of the department. Once he was of the view that these expenses were essential and incidental to the business he should have examined the issue vis-a-vis total turn over of the appellant and the particular business activity for which such expenses incurred but he has summarily arrived at the findings for disallowing 75% of all such expense's which were essential as noted by him. 4.1.2 It may be noted that 50% of such expenses were disallowed for Asstt. Years 2001-02 in absence of vouchers and this issue was examined in great detail by my predecessor in office in appeal No. IT-59/04-05 dated 12.01.2006 and disallowance of expenses to the extent of Rs. 50,000/ - only was confirmed and the same was also deleted by the ITAT per order da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and findings recorded in this behalf and it was contended that there was nothing wrong if salary was paid to family members of the appellant For the work carried out by them and the appellant was very much justified in engaging his own family members to discharge various duties, who were trustworthy compared to outsiders. It was also emphasized that the AO has not cited any instance to support his findings that the amount paid to various members was excessive or unreasonable. The appellant also enclosed photo copy of Register for the month of December to February, 2003, in the compilation filed and it was submitted that merely from failure to obtain signatures who were family members or regular employees can not inferred that such payments were bogus or unverifiable, though salary was being paid on monthly basis. 4.4.2 The A.R. also drew attention to the findings recorded by Assessing Officer for assessment year 2001-02, wherein the Assessing Officer made a disallowance of Rs. 50,000/- out of salary payments made to various members of Narang Family and it was further emphasized that such disallowance was also deleted by CIT(A) and such action was confirmed by I.T.A.T. 4.4.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses at Rs.18,072/- out of total amount claimed at Rs.23,360/- for want of necessary vouchers i.e. broadly following the findings in respect of Hammali and freight payments. The appellant has also advanced similar contentions, hence considering the overall facts and circumstances of the case and huge turn over of the appellant such disallowance is not found to be justified and accordingly directed to be deleted. 4.8 Next grievance is against disallowance of stationary expenses' at Rs. 4,582/-. The A.O has made the disallowance in the similar fashion considering the total amount claimed at Rs. 9,164/-. Considering overall facts and circumstances of the case such disallowance is held to be nor justified and unwarranted and accordingly directed to be deleted. 4.9 Next grievance of the appellant is against disallowance of Motor car expenses at Rs. 26,503/- out of Rs. 53,005/-claimed by the appellant. The AO has disallowed such expenses with the similar findings as noted in respect of courier expenses. Considering the personal element involved the disallowance of such expense is directed to restricted at Rs.10,000/- and the balance is directed to be deleted in view of detailed fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... name of individual partners and the interest income on the basis of TDS certificates issued by the Bank were offered for taxation in the hands of partners. Copies of FDRs have also been filed with compilation. On consideration of facts and submissions of the appellant such addition is not found to be justified and accordingly directed to be deleted. 4.14. Last grievance is against disallowance of Commission expenses claimed at Rs. 79,482/ -. The AO has noted in para 14 of assessment order that it was not clear why the Company had to pay commission and to whom the same has been paid. Accordingly in absence of any evidence in books of account and the purpose for paying the same was not clear, he disallowed the total amount being claimed. 4.14.1 It was emphasized by the AR that books of accounts were in the custody of department and similar claim of expenses has been pressed for deduction in the case of appellant and disallowance was made by AO in Asstt. Year 2000-01 and the same was deleted in appeal by CIT(A). It was, however, mentioned that books and vouchers were in the custody of department and as such he was unable to furnish complete details of such payments. 4.14.2 The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his own family members to discharge the various duties, who was trustworthy compared to the outsiders. The Assessing Officer had made disallowance merely on the ground of failure to obtain signature in the salary register. Keeping into view the amount of expenditure incurred on sales vis- -vis total turnover of business and nature of business activities of assessee, we do not find any infirmity in the order of CIT(A) for deleting the disallowance on account of salary expenses. 8. Disallowance made on account of rent payment was restricted by the ld.CIT(A) to the extent of Rs. 11,500/- by observing that rent to the extent of Rs. 1,80,480/- was reasonable taking the rent at Rs. 2/- per sq.ft., which was also allowed in the assessment year 2001-02, there is no infirmity in the order of CIT(A) for deleting the disallowance on account of rent. 9. Out of courier expenses of Rs. 23,360/-, the Assessing Officer has disallowed Rs. 18,072/-, which was deleted by the ld.CIT(A) by observing that there was huge turnover of the assessee and such disallowance was not warranted. There is no infirmity in the order of CIT(A). 10. Out of stationery expenses claimed at Rs. 9164/-, the Assessing ..... 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