9911796707
TMI Blog2015 (9) TMI 699X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and the consequent order passed u/s 144 read with section 147 of the Act. Ground Nos. 3 & 4 are on the merits of the addition sustained by ld. CIT(A) out of adhoc disallowance made by AO. 3. Briefly the facts are, assessee a partnership firm is engaged in business of manufacture and sale of barytes lumps and powder. For the AY under dispute, assessee filed its return of income on 01/11/2004 declaring total income of Rs. 28,13,783. The return filed by assessee was processed u/s 143(1) on 11/11/04. Subsequently, on 15/10/2010, AO issued a notice u/s 148 of the Act calling upon assessee to file its return. After complying to the notice issued u/s 148, assessee sought for the reasons for reopening of assessment and AO also communicated the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s loss on sale of assets has resulted from sale of assets which were not shown in the books of account in AY 2004-05. He, therefore, opined that the difference of Rs. 8,37,619 in loss on sale of asset is attributable to sale of assets in the block of vehicles that were not shown in the books of account in AY 2004-05. On the basis of the alleged difference in loss on sale of assets found by AO, he computed the value of assets at Rs. 41,88,095. After disallowing the depreciation allegedly claimed on two cars, AO added an amount of Rs. 42,16,457. Apart from making addition on the basis of reasons recorded, AO also proceeded to make adhoc disallowance of 25% amounting to Rs. 68,37,471, out of the expenditure of Rs. 2,73,44,888 claimed by assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment order passed consequent thereto on the following issues: * There being no fresh or tangible material to point out escapement of income, reassessment proceeding is invalid. * The belief formed by AO is not of a reasonable person properly instructed in law. * The AO should have dropped the proceeding after the assessee clarified the issues on which assessment was reopened. * Reopening of assessment was made on presumption and doubts and was only for further verification. * Reasons for reopening as communicated to assessee and as supplied at the time of hearing before ld. CIT(A) are different. * Approval granted by the sanctioning authority is mechanical. * Reopening of assessment is not bonafide as several assessments were reopen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tified the initiation of proceeding u/s 147 of the Act as well as addition sustained by ld. CIT(A). 11. We have considered rival submissions and perused the orders of revenue authorities as well as other materials on record. We have also applied our mind to the decisions relied upon by the parties. As can be seen from the order of ld. CIT(A) out of the three additions made by AO, ld. CIT(A) has deleted two additions relating to payment of self-assessment tax and value of undisclosed asset, which formed the basis of reopening. As far as the adhoc disallowance of Rs. 68,37,471 from expenditure, ld. CIT(A) has sustained the addition to the extent of Rs. 13,31,815, which is the only surviving addition awaiting adjudication before us. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is highly improbable that the assessee without incurring the expenditure has claimed the amount of Rs. 97,224. When assessee has meticulously maintained bills and vouchers for almost the entire expenditure incurred absence of one bill would not lead to the conclusion that assessee has not incurred the expenditure. So far as the amount of Rs. 49,38,363 is concerned, it is not in dispute that the expenditure incurred is towards labour charges. Only because the expenditures were supported by self-made vouchers a part of the expenditure cannot be disallowed unless it is proved that the expenditure incurred is unreasonable or excessive compared to the turnover of assessee. It is quite evident that ld. CIT(A) does not dispute the fact that assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
