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TMI Blog2012 (11) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowing Rs.1,04,880/- being 10% of salary. 2. On the facts and in circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in confirming the action of the A.O. in disallowing Rs.76,740/- out of packing expenses. 3. On the facts and in circumstances of the case as well as law on the subject, the Ld. CIT (A) has erred in confirming the action of the A.O. in disallowing Rs .65,302/- being 20% of telephone expenses, vehicle expenses and depreciation of car." 3. The assessee is a firm engaged in the business of dyeing, printing and finishing work of grey fabrics on job work basis. It filed its return of income on 27-11-2003 declaring total income of Rs.8,49,632/-.The case was selected for scrutiny. Assessment was fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue stamp did not mean salary expenses incurred was not genuine. CIT (A) did not agree with the contentions of the assessee. He upheld the order of A.O. by holding as under:- "5. I have carefully considered the matter. The A.O. made only a very small disallowance @ 10%. The assessee may have produced employee-wise details of salary expenses, but such details ought to have verifiable from the books maintained by the assessee. The salary register however was not complete in the sense that, many of the entries did not have signatures of the recipients while in some there were signatures but there was not revenue stamp. It may be argued that the employees often being illiterate could not put the signatures properly, but it could not be denied t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In view of the totality of facts, we are of the view that A.O. was not justified in making the disallowance. We thus delete the disallowance made. Thus this ground of assessee is allowed. 11. The ground No.2 is regarding disallowance of packing expenses of Rs.76,740/-. 12. On verification of details of packing expenses of Rs.17,90,771/- debited to Profit and loss account, the A.O. observed that for expenses of RS.76,740/-, no bills or vouchers were produced for verification. It was submitted that most of the payments were by cheques and due to misplacement of bills, vouchers; the same could not be produced. A.O. did not agree with the contention of assessee for the reason that the payments of Rs.76,740/- were made in cash and no supportin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the nature of expenses and the totality of facts, we feel that it will meet the ends of justice if the expenses of disallowance is estimated at Rs.30,000/-. We thus restrict the disallowance to Rs.30,000/- instead of Rs.76,740/- made by A.O. Thus this ground of assessee is partly allowed. 16. Ground No. 3 relates to disallowance out of telephone, vehicle and depreciation on car. 17. A.O. noticed that assessee has debited vehicle expenses of Rs.30,200/-, telephone expenses of Rs.1,52,703/- and depreciation on car of Rs.1,43,605/-. Assessee was asked to bifurcate the business and non business expenses and show cause as to why 20% of aforesaid expenses be not disallowed on account of personal use. Assessee did not furnish the detail ..... X X X X Extracts X X X X X X X X Extracts X X X X
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