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TMI Blog2013 (5) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim of the assessee and when the most of the payments have been made in cash in respect of bills of more than Rs.20,000/-. Assessee has not been able to place on record anything to substantiate consumption of 300% more diesel in assessment year under consideration as compared to earlier year particularly when there is no addition of new generator or increase in capacity of generator in the assessment year under consideration. Thus considering the claim of the assessee in the preceding assessment year of diesel was Rs.8,29,081/-, as compared to Rs.23,04,215/-, in assessment year under consideration and even after considering increase in diesel price and also presuming that there was more use of generator it cannot exceed 300%. As assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a third party is not allowable as a deduction while computing the income in respect of said premises. 3. At the time of hearing, ld A.R. conceded that similar issue was considered by ITAT Mumbai Benches in assessment year 2006-07 in assessee's own case being I.T.A. No.3711/M/2010 vide order dated 30.5.2012 and the Tribunal vide para 5 of the said order decided the issue against the assessee by confirming the order of ld CIT(A). He submitted that a copy of the said order of the Tribunal is placed at pages 157 to 163 of PB. In view of above, ld A.R. submitted that said ground Nos.1 2 be decided against the assessee. 4. In view of above submissions of ld A.R. and considering the orders of authorities below as well as the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor running expenses under section 40A(3) of the Act and also considering the findings of the AO as well as of ld CIT(A) for assessment year 2006-07 and also considering that substantial bills were in the range of Rs.20,000/- and more and the expenses were claimed in cash, ld CIT(A) confirmed the disallowance of Rs.16,64,420/- (Rs.21,04,215 - Rs.4,39,595). It is relevant to state that ld CIT(A) has stated that the generator is set on godown at Bhiwandi whereas substantial bills pertain to other than Bhiwandi i.e. Mulund in Mumbai and it raises suspicion as to genuineness of the expenses. Hence, assessee is in further appeal before the Tribunal. 8. During the course of hearing, ld A.R. referred earlier order of the Tribunal dated 30.5.2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for consumption purpose, as is evident from the bills enclosed in the PB at pages 26 to 84, why the payments were not made in cheque particularly when the amount was exceeding Rs.20,000/-. Ld A.R. submitted that assessee on its own made disallowance u/s.40A(3) of the Act at 20% of Rs.21,97,974/- but could not satisfactorily explain the reasons for purchase of diesel at Mulund in Mumbai, which is stated to be at a distance of 12-15 kms from Bhiwandi, place where generator is installed in the godown. However, ld A.R. in his submission stated that in the preceding assessment year, the Tribunal restricted the disallowance to Rs.1,51,315/- out of total claim of Rs.8,29,081/-. Ld A.R. could not give any supporting evidence about the increase o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee on its own has made disallowance of Rs.4,39,595/- out of its claim, it is fair and reasonable to restrict the disallowance to Rs.8 lakhs over and above the disallowance made by the assessee at Rs.4,39,595/-. Hence, Ground Nos.3 4 are allowed in part as indicated above by modifying the orders of authorities below. 11. In Ground No.5, assessee has disputed the order of ld CIT(A) in confirming adhoc disallowance to the extent of 5% of expenses under the head "conveyance, order booking, repairs and maintenance, staff welfare expenses and administrative charges". 12. Assessee has claimed cash expenses under the following heads aggregating to Rs.13,32,617/- as under: 1. Conveyance expenses 84,671 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made on the basis of self made vouchers, and, therefore, same could not be verified, is reasonable and no interference is called for. Hence, we uphold his order and reject Ground No.5 of appeal taken by assessee. 17. Assessee has also taken an additional ground of appeal stating that ld CIT(A) has erred to disallow amount of - Rs.94,977/- under section 14A r.w. Rule 8D. 18. AO has stated that assessee has earned exempt income on account of dividend amounting to Rs.1,49,973/- on investment in Mutual Fund of Rs.27,15,342/-. The said dividend income is exempt under section 10 of the Act. AO by applying Rule 8D, computed the disallowance of Rs.94,977/- and added to the income of the assessee. Being aggrieved, assessee filed appeal before l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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