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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 ..... n the following paragraphs. 2. Firstly , we shall take up ITA No.8850/M/2010, which is filed by the assessee against the order of the CIT (A)-34, Mumbai dated 25.10.2010 for the assessment year 2004-2005 and the grounds raised in this appeal are as under: "1. The orders passed by the lower authorities are bad in law and bad in facts. 2. The lower authorities have grossly erred in holding that the appellant could not produce all the bills, vouchers etc and have further erred in disallowing / adding Rs. 1,00,000/- to returned income on ad-hoc basis without specifically pointing out as to which particular expenditure was not fully vouched. 3. The Ld CIT (A) has grossly erred in directing the AO to reduce Rs. 1,00,000/- from WIP account eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering the fact that it is an auditable case and auditors have issued report u/s 44AB of the Income Tax Act, 1961 and the AO has failed to point out any specific defects in the said supportive evidences. Bringing out attention to page 3 and 4 of the paper book, Ld Counsel mentioned that the cash related expenditure is minimal and therefore, there is no need for any ad-hoc disallowances. 5. On the other hand, Ld DR stated that the expenses incurred on various accounts such as carpentry charges, painting charges, electric expenses, marble & tile fixing charges, plumbing charges, sand & metal charges etc involve cash payments only. Normally, such expenses are suffer from third party vouchers and evidences. 6. We have heard both the parties an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case, provisions of law, method of accounting regularly followed and judicial pronouncements, impugned treatment of expenses is wrong and untenable in law." 9. Ground no.1 & 2 pertained to disallowances amounting to Rs. 4,19,789/- out of expenditure like bank charges, office maintenance, telephone expenses, staff salary, depreciation on the assessts connected to the assessee's business. During the assessment proceedings, AO observed that the assessee, who is engaged in the business of builder and developer, has followed the project completion method and debited the expenses to work-in-progress (WIP) account. In the P&L Account, no income was declared by the assessee and various expenditures i.e., salary, depreciation, telephone etc w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been incurred by the appellant during the regular course of their business. The allowance of expenditure is deferred because of the method followed by the appellant on completion of project only. Thus, ground no.1 & 2 are partly allowed." 10.1. Aggrieved with the above decision of the CIT (A), assessee filed the present appeal before the Tribunal by raising the above mentioned ground no.1 and 2. 11. During the proceedings before us, Ld Counsel for the assessee argued that the impugned expenditure since pertains to couple of projects during the year unlike the single project undertaken by the assessee in the earlier years the expenses could not be apportioned between the projects, therefore, the claim of the assessee that the whole of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... une of Rs.2,02,987/-, made by the AO, on account of non-deduction of TDS. Matter travelled to the first appellate authority. During the first appellate proceedings, the assessee's submissions are given in para 3.2 of the impugned order which read as under: "The appellant claimed Rs. 2,02,987/- as deduction for disallowance made in the preceding year u/s 40(ia) for want of TDS on interest paid / payable at Rs. 2,02,987/-. Since, this is a statutorily allowable deduction, the impugned disallowance, without even looking in to the claim is wholly wrong. We are enclosing herewith a copy of return of income filed for AY 2005-06 showing the disallowance of interest and request that the AO may please be directed to allow the deduction as claimed." ..... X X X X Extracts X X X X X X X X Extracts X X X X
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