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TMI Blog2012 (9) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... th the evidence gathered behind its back, hence, the statement cannot be the basis on which a conclusion can be drawn that the amounts received from these two companies are infact accommodation entries. In absence of any other evidence, addition made is directed to be deleted Dis-allowance of expenditure on surmise that sales may have been suppressed and the amounts were routed through these two companies - Held that:- If this is the case of the A.O, then the question of disallowance of expenditure on the ground that these are accommodation entries and hence do not have any expenditure does not arise. Expenditure incurred on manufacture and sales has to be allowed - Decided in favor of assessee - ITA No: 121/Del/2009 - - - Dated:- 11-7- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed certain expenditure on the ground that the claim was excessive. He referred to the sales figure of Rs.31,55,256/- and increase/decrease in stock of Rs.15,92,418/- and observed that the claim for expenditure of Rs.76,30,870/- is on the higher side and accordingly disallowed Rs.30,05,483/-. While doing so he listed out expenses incurred on 9 heads of expenditure at page no.4 of his order. The assessee carried the matter in appeal. The First Appellate Authority upheld the validity of reopening. He also upheld the assessment as the amount received from M/s MSCAMS Ltd. And M/s FPP Ltd. as income from other sources. It is pertinent to note that the Ld.CIT(A) has not dealt with the argument of the assessee that the statement recorded was not s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. He argued that no basis has been given by the Assessing Officer and disallowance was made based on surmises and conjectures. He submitted that there is no reasonable explanation or logic as to how the disallowance was made. 4. On ground no.4 the Ld.Counsel though not leaving this ground, submitted that he is not pressing the same in view of the smallness of the amount. 5. The Ld.Departmental Representative Dr.B.R.R.Kumar on the other hand vehemently opposed the contentions of the assessee s counsel and submitted that the companies which have paid the assessee confirmed that these are accommodation entries. He referred to the admission made by Sanjay Rastogi and argued that this is sufficient evidence. He submitted that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the statement cannot be the basis on which a conclusion can be drawn that the amounts received from these two companies are infact accommodation entries. The Revenue does not have any other evidence other than this statement. 9. Coming to the disallowance of expenditure, it is the case of the Assessing Officer that the assessee has manufactured inverters and sold the same and that these sale proceeds were suppressed and the amounts rooted through these two companies. If this is the case of the A.O, then the question of disallowance of expenditure on the ground that these are accommodation entries and hence do not have any expenditure does not arise. Expenditure incurred on manufacture and sales has to be allowed. There is no logic given ..... X X X X Extracts X X X X X X X X Extracts X X X X
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