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TMI Blog2014 (1) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... t completion method - These expenses in work-in-progress can be considered at the time when the projects are complete and revenue is recognized - The allowance of expenditure is deferred because of the method followed by the appellant on completion of project only - Assessee should not be allowed to deviate from this method without there being no specific and sustainable reason - Decided against assessee. Non-deduction of TDS - Held that:- As the assessee is following the project completion method, the expenses in work-in-progress can be considered at the time when the projects are complete and revenue is recognized -The impugned expenses on which no TDS is made cannot be disallowed in this year as it is not charged in the P&L Account - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount even though complete details were furnished in support of expenses. The impugned disallowance is wrong and contrary to evidence on record. 4. Having regard to the facts of the case, provisions of law and judicial propositions, the impugned disallowance of Rs. 1,00,000/- is arbitrary and untenable. 3. At the outset, Shri G.P. Mehta, Ld Counsel for the assessee mentioned that the only issue raised in the grounds relates to the confirming of addition of Rs. 1 lac on ad-hoc basis for want of complete details and supported evidences. During the proceedings before the first appellate authority, CIT (A) confirmed the disallowance by stating the following. 2. I have gone through the contents of the impugned assessment order as well a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the parties and perused the orders of the Revenue Authorities as well as the material placed before us. On hearing both the parties, we find that the details furnished by the assessee before the Assessing Officer / CIT (A) are not open to third party scrutiny and they have not sustainable to severe scrutiny of the Revenue Authorities. In our opinion, assessee s general explanations are not sustainable. Therefore, we are of the opinion that the disallowance made by the AO, sustained by the CIT (A), may be restricted to Rs. 75,000/- on ad-hoc basis and it should meet the ends of justice. Accordingly, grounds raised by the assessee are partly allowed. 7. In the result, appeal of the assessee is partly allowed. I.T.A. No.8852/M/2010 (AY: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciation, telephone etc were debited claiming net loss of Rs. 4,19,789/-. Since, no business was carried out by the assessee and the expenses relate to two new projects, the AO made disallowance amounting to Rs. 4,19,789/-. Aggrieved with the above decision of the AO, assessee filed an appeal before the first appellate authority. 10. During the proceedings before the first appellate authority, after considering the submissions of the assessee, CIT (A) partly allowed assessee s appeal vide para 2.3 of the impugned order, which reads as under: 2.3. I have gone through the contents of the impugned assessment order, the arguments and submissions of the Ld AR of the appellant as well as the material available on record. I find that these are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee that the whole of expenditure should be allowed without any disturbance. 12. On the other hand, Ld DR relied on the orders of the AO and the CIT (A). 13. We have heard both the parties and perused the orders of the Revenue Authorities as well as the material placed before us. The argument of the Ld Counsel that the impugned expenditure during the year pertains to two projects and the expenditure could not be apportioned between the projects should not stand considering the fact that the expenditure is allocable based on the various criterions including that of the actuals. Otherwise, turnover ratio, profits ratio etc should assist the assessee in this regard. Further, we need to clarify that there is no accounting method speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allow the deduction as claimed. 15. After considering the above submissions of the assessee, CIT (A) rejected the assessee s appeal vide para 3.3 of his order, which reads as under: 3.3. I have gone through the contents of the impugned assessment order, the arguments and submissions of the Ld AR of the appellant as well as material available on record. I find that the impugned expenses on which no TDS is made cannot be disallowed in this year as it is not charged in the P L Account but the appellant had claimed that it should be allowed in this year as payment of TDS has been done whereas the same amount was disallowed in earlier years. In my opinion, this claim has also to be differed till the revenue recognized in the year in which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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