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TMI Blog2014 (12) TMI 1057X X X X Extracts X X X X X X X X Extracts X X X X ..... as against the confirmation of ₹ 1.5 lacs - CIT(A) was reasonable to confirm 10% addition under the head staff mess expenses for non-business purposes - with respect to difference in the M/s Nakoda Crushers, the assessee himself has not shown the expense for which, the argument taken by the assessee not acceptable as who has prevented to the appellant for claiming these expense - assessee himself admitted different cheque given and amount credited by the M/s Nakoda Crushers at ₹ 410 - M/s Nakoda Crushers had shown receipt of cheque of ₹ 23,662/- has not been reconciled with evidence before the lower authorities, for which sufficient time has been given to the assessee - the order of the CIT(A) under this head is upheld - the last ground of appeal is against working of net profit @ 8.65% by making the additions – substantial relief given in case of the assessee is upheld, therefore, after appeal effect, the assessee’s net profit will be reasonable – Decided partly in favour of assessee. - I.T.A. No. 461/JP/2012 - - - Dated:- 21-11-2014 - Shri R. P. Tolani And Shri T. R. Meena,JJ. For the Petitioner : Shri P. C. Parwal For the Respondent : Mrs. Ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icle expenses but no log book had been maintained. These expenses were mainly claimed for fuel/repair expenses. The personal use of vehicle cannot be ruled out, therefore, he disallowed 20% out of total claim. Further depreciation @ 20% also disallowed on car and motor cycle. The expenses claimed under the head telephone expenses, Diwali expenses, which were not supported with proper register or bill voucher and personal element was found by the Assessing Officer out of 20% was disallowed out of telephone expense and 50% on purchase of silver coins, sweets and Diwali expenses. Further the assessee has debited wages and allowances of ₹ 35,29,040/-, labour charges of ₹ 30,29,014/-, coal blending and mixing expenses of ₹ 26,90,125/- and salary expenses of ₹ 26,18,282/-. No proper record to verify the actual payment was available with the assessee. Muster roll register produced for the attendance was not found authentic as no signatures were made on it. He particularly quoted the muster roll register produced for the month of August, 2005 and August, 2006. As per his observation, it was maintained as per assessee s suitability. He could not verify the labour for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ger account placed at PB 9-14. The expenditure is reasonable considering the volume of business. The AO has not specified any instances where vehicles are used for personal purpose. Thus, the disallowance made by the AO is unjustified. Further, the depreciation is a statutory provision, which cannot be denied on account of personal use. For this reliance is placed in the case of Kailsh Chand Gupta V/s DCIT 35 Taxworld 36 wherein it was held that claim of depreciation is a statutory provisions which cannot be denied on the basis of personal use of the assessee. The breakup of telephone expenses is at page 5 of the CIT(A) order. The expenses on mobile used by the partner is only ₹ 3,451/- Therefore, the disallowance if any for personal use should be restricted with reference to the mobile expenses of the partner only. The distribution of silver coins and sweets to various persons connected with the business on the occasion of Diwali festival is normal custom and therefore the disallowance made is unjustified and be deleted. In respect of payment made to labour the assessee has produced attendance and labour payment register before the AO and also before CIT(A). The AO has accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- on which net profit declared is 7.29% which is comparable with net profit rate of 7.23% declared on receipt of ₹ 1,32,93,337/- in the last year. As a result of the disallowance made by the AO and confirmed by CIT(A) the net profit rare has increased to 8.65%. This shows that the various disallowances made by the AO is highly unreasonable and excessive and therefore the various disallowances made by the lower authorities deserved to be deleted. 6. At the outset, the learned D.R. supported the order of the learned CIT(A). 7. We have heard the rival contentions of both the parties and perused the material available on the record. The assessee could not furnish required details for verification of the Assessing Officer as well as the learned CIT(A). The genuineness of the expenses is to be seen by the Assessing Officer as the onus is on the assessee to prove that the expenditure wholly and exclusively was incurred for business purposes. Non business purposes cannot be ruled out under these heads. The learned CIT(A) confirmed the addition appears to be higher side, therefore, in the interest of justice, we confirm these additions under the head jeep vehicle expense, excep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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