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TMI Blog2013 (10) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... urnment in the case therefore, the assessee is very much aware about the date of hearing of the appeals. In these circumstances we propose to hear and dispose of these appeals ex-parte. 3. The assessee has raised the following grounds: "1) The learned CIT (A) erred in disallowing the revenue expenditure of Rs 2,15,73,054/-. In this respect she ought to have appreciated that the said expenditure being revenue in nature and having incurred during the relevant previous year is fully allowable in computing the profits of the business chargeable to tax. Your appellant humbly prays that the said revenue expenditure of Rs.2,15,73,054/- be allowed as deduction. 2) The learned CIT (A) erred in treating the fixed assets purchased at cost of Rs.5,86,292/- during the year as unexplained expenditure within the meaning of sec 69 C of the I.T. Act 1961 and thereby making the addition of the said amount to the income. In this respect she ought to have appreciated that the expenditure is fully accounted for in the books of accounts and the source of the payments made for the said purchases is also explained as recorded in the books of accounts. On these fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of unexplained expenditure / investment, disregarding the finding of the Assessing Officer that the requisite details to support the claim were not furnished during the assessment proceedings." 5. Ground No. 1 of the revenue's appeal and the Ground No. 2 and 3 of assessee's appeal are common being addition u/s 69C towards purchase of fixed assets. Therefore, both these grounds are taken up and disposed of together. During the course of assessment proceedings the AO asked the assessee to furnish details of addition to the fixed assets, supporting bills, documentary evidences and dates on which such assets are put to use. The assessee filed the details of the assets purchase during the year under consideration amounting to Rs. 12,41,497/-. However, the assessee could not produce the bills with regard to the addition made during the year to the fixed assets. The Assessing Officer made an addition of Rs. 12,41,497/- u/s 69C of the Income Tax Act by treating the said amount as unexplained expenditure in the absence of supporting evidence. The AO has also disallowed the depreciation thereon amounting to Rs. 4,17,567/-. On appeal, the CIT(A) has deleted the addition made by the AO i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or other details are available for the remaining assets. Hence, to the said extent the action of the A.O. in treating the expenditure as not explained and disallowing depreciation thereon is upheld. It has also been submitted by appellant that whenever bills are available the same have been produced before A.O. When the purchases have not been substantiated, the deeming fiction of s. 69C comes into operation and hence the expenditure as claimed with reference to the said asset is treated as deemed income under s. 69C." 8. Thus, it is clear from the above finding that the CIT(A) has deleted the addition in respect of Car, TV and Tankers by considering the facts that the expenditure relates to Car is a margin money paid by the bankers directly to the party whereas in respect of purchase of TV the assessee produce the bill dated 3.7.2006 and the amount in respect of tankers represents discount on purchase of tankers which was given by the party and created in the assets account. The remaining addition was sustained by the CIT(A) because the assessee failed to produce any evidence in support of the same. 9. Having considered the facts and material we do not find any reason to interfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that packing materials, printing, and stationery were purchased, no any job work was involved, and hence there was no requirement to deduct tax at source. The appellant has also furnished copies of the ledger accounts relating to packing material and printing & stationery. From the details as furnished it is seen that payments have been made against purchases, it is only a case of sale and not for, carrying out any work. The A.O. has also not brought on record that any work, as envisaged in 194C has been carried out. When there is no element of 'any work' involved Sec. 194C will not apply. Therefore, it is held that packing material and printing and statutory are not subject to TDS. As regards, Transportation and Advertisement, the only ground taken by appellant is that the payments do not exceed Rs. 20,000/-. However, from the material as furnished by the appellant it is inferred that the aggregate exceeds Rs. 50,000/- and hence this plea is not tenable. Moreover, no specific party-wise details have been furnished by the appellant such as name of party, amounts paid, date(s) of payment etc and hence I am upheld the action of the A.O. in this regard. As regards crushing charges and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that the assessee has not claimed expenditure with respect to this amount. He has relied upon the order of the Assessing Officer. 15. Having considered the submissions of Ld. DR as well as the perusal of the orders of the authorities below we find that the reasoning given by the CIT(A) in deleting the addition is not proper. The CIT(A) has decided this issue in para 8 as under: "8. I have considered the matter. The A.O. has brought to tax as income advances made, deferred revenue to be written off, and pre-operative expenses as unexplained expenditure. In the first place, the said items are not in the nature of expenditure and have also not been treated as expenditure. The same have not been claimed as deduction against the total income. When an expenditure has not been incurred, the same cannot be brought to tax as income under the deeming provisions of the Act. Presumably the A.O. has brought to tax the said sum under s. 69C. The condition precedent for invoking section 69C is that amount spent must be an expenditure incurred. When the condition is not satisfied, s. 69C cannot be invoked. Further, from the details as present in the assessment order, it is seen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The expenditure has been incurred by the assessee before the use of plant and to make it fit for use. Thus, this expenditure does not fall under the current repairs in terms of section 31 of the Income Tax Act. The AO has allowed 1/6th of the expenditure as deferred revenue expenditure because the benefit of the same is available over the period of 6 years. The CIT(A) has confirmed the action of the AO while deciding the issue in para 4.5 as under: "4.5 During the course of hearing of the appeal, in order to ascertain the nature of the expenditure the appellant was directed to give specific details of the nature of the work carried out in the closed plant. On a perusal of the break of the sum of Rs. 2,58,87,664/- it is seen that extensive work has been carried out on the structure of the factory building as well as with respect to the equipment. Executive cabins have been made, it floors related, AC sheets were installed on the top of the factory roof, the broken roof in the milk section was replaced, cables replaced, cooling tower and affluent plant revamped, angles and still rods replaced, iron rods and channels replaced in molasses tanks, installation work done in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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