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TMI Blog2012 (11) TMI 471X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance is restricted to Rs.4,85,252/- amount payable as on 31-3-2005 and the balance disallowance is deleted - partly in favour of assessee. Addition on estimation of closing stock - CIT(A) deleted the addition - Held that:- The method of accounting of the assessee was same as adopted by the assessee in the earlier period and has been accepted throughout by the department. There is no valid reason for disallowance of 50% of the purchases and the AO has not taken into consideration RA bill for the month of March, as also payment received during the month. In the facts and circumstances of the case, there being no valid reason for making the addition on account of estimation of closing stock - in favour of assessee. Disallowance on account of site expenses - CIT(A) deleted the addition - Held that:- The assessee could not file site-wise break-up of the site expenses, and therefore the disallowance made at Rs.32,448/- by the AO was quite justified - against assessee. Disallowance of office expenses - Held that:- There is no finding of any non-genuineness of the expense claimed under the head “salary & wages”. These expenses incurred under the head “salary & wages” by na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd penalty for the late payment are genuine expenses, and there is no finding that these are non-genuine expenses claimed by the assessee. The learned DR has relied on the order of the AO and the CIT(A). 7. We have considered rival submissions and have perused the orders of the AO and the CIT(A). We find that the CIT(A) has dismissed this ground of the appeal of the assessee by recording that authorised representative of the assessee has not made any submissions on this issue, and accordingly confirmed the addition. We find that since the authorised representative of the assessee has not made any submissions before the CIT(A), there is no mistake in the order of the CIT(A) in confirming the disallowance, and accordingly, the ground no.2 of the assessee s appeal is dismissed. 8. The ground no.3 of the assessee s appeal is as under: 3. On the facts and in circumstances of the case as well law on the subject, the ld.CIT(A) has erred in partly confirming the action of AO in making disallowance of Rs.50,27,336/- out of Rs.78,37,140/- u/s.40(a)(ia) of the Act. 9. The learned counsel for the assessee submitted that the issue is covered in favour of the assessee with the decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en by the AO In para-4.2 of the assessment order, it appears that he did not completely understand the modus operandi of the Assessee's business and its dealings with the SMC. Whenever a contract is awarded, especially a civil contract of construction or of laying pipes, of building/ repairing of roads, etc, the contractor raises RA bills every month as per the terms of the contract, and such bills are usually made during the third-fourth week of the month. Payments are made by the contractee on verification of the bills raised and the stage of work reached/completed. Therefore, at every stage, i.e. every month, the contractor raises bills on one hand and on the other makes purchases for the next month/billing cycle. The purchases made in the last month of the financial year usually raises queries from the IT Department. However, the point to note is that, when the Assessee raised the bill on 20th of March for completion of the contracted work upto a certain stage, it had materials remaining already In hand, but it also had to make purchases for the next cycle. The total purchases therefore, made in the month of March, would have been for the February-March period as also for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.24,01,268. We find that the method of accounting of the assessee was same as adopted by the assessee in the earlier period and has been accepted throughout by the department. There is no valid reason for disallowance of 50% of the purchases and the AO has not taken into consideration RA bill for the month of March, as also payment received during the month. In the facts and circumstances of the case, we are of the considered view that there being no valid reason for making the addition on account of estimation of closing stock, the CIT(A) was justified in deleting the same and the order of the CIT(A) on this issue is confirmed and the ground no.1 of the Revenue s appeal is dismissed. 14. The ground no.2 of the Revenue s appeal reads as under: 2. On the fact and circumstances of the case and in law, the learned CIT(A) has erred in deleting the disallowance made by the AO of Rs.32,448/- on account of site expenses . 15. We have heard both the parties. The case of the Revenue is that the assessee could not file proper details of the site expenses, and therefore the disallowance was rightly made by the AO. We find that the assessee could not file site-wise break-up of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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