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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 ..... ,061/- Depreciation of Jeep & Motor Cycle Rs. 13,718/- Telephone Expenses Rs. 4,630/- Diwali Expenses Rs. 4,330/- Expenses for labour Rs. 1,50,000/- Staff Mess Expenses Rs. 12,181/- 2. The learned Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming the addition of Rs. 28,687/- (4,615 + 24,072) on account of discrepancy in the account of M/s Nadoka Crushers. 3. The learned Commissioner of Income Tax (Appeals) has erred on facts and in law in ignoring the contention of assessee that net profit rate after considering these additions/disallowances would work out at 8.65% which is unreasonable and unjustified." 2. The grounds No. 1 to 3 of the assessee's appeal are interlinked and against the confirming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , sweets and Diwali expenses. Further the assessee has debited wages and allowances of Rs. 35,29,040/-, labour charges of Rs. 30,29,014/-, coal blending and mixing expenses of Rs. 26,90,125/- and salary expenses of Rs. 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 force executed as per specific work order, therefore, he disallowed ad hoc addition of Rs. 1,50,000/- for the possible leak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 10% out of mess expenses. For the discrepancy found in the account of M/s Nakoda Crushers, it has been held that it is surprising that even after expiry of more than five years, the account related to F.Y. 2005-06, the assessee could not reconcile the account and obtained no information from M/s Nakoda Crushers to justify his claim, thus he confirmed the addition. 4. Now the assessee is in appeal before us. 5. The learned A.R. for the assessee submitted that the jeeps and vehicles are mainly used for transporting the labour from one site to other site and bringing the labour from the nearby villages. The expenditure under this head includes petrol expenses, diesel expenses and repair expenses as evident from the copy of ledger account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facilities to the labours at site. Complete bills and vouchers were produced before the AO. After verification of voucher, AO has not pointed out any expense which is not for business purpose. Hence, disallowance made is unjustified and be deleted. In various cases it has been held that ad hoc disallowance out of expenses is not justified. For this reliance is placed on the following cases:- (i) CIT Vs. Premier Vegetable Products Ltd. (2014) 97 DTR 230 (Raj.)(HC) (ii) ACIT Vs. Ganpati Enterprises Ltd. (2013) 142 ITD 118 (Delhi)(Trib.) (iii) CIT Vs. Oracle India (P) Ltd. 199 Taxman 181 (Del) (HC) (Mag.) (iv) Arthur & Anderson & Co. Vs. ACIT 2010-TIOL-416-ITAT-Mum. It is submitted that as per the account of M/s Nakoda Crushers it has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the appellant for claiming these expense. The assessee himself admitted different cheque given and amount credited by the M/s Nakoda Crushers at Rs. 410/-. Further M/s Nakoda Crushers had shown receipt of cheque of Rs. 23,662/- has not been reconciled with evidence before the lower authorities, for which sufficient time has been given to the appellant. Therefore, we confirm the order of the learned CIT(A) under this head. The last ground of appeal is against working of net profit @ 8.65% by making these additions. However, we have substantially given the relief in case of the assessee in this paragraph, therefore, after appeal effect, the assessee's net profit will be reasonable, we allow the appeal partly. 8. In the result, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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