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TMI Blog2015 (12) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... 38,500/-. The ld.CIT(A) has only upheld the disallowance of ₹ 87,35,038/- which has been further reduced to ₹ 86,643/- by the Tribunal. In view of the above facts, the assessee does not deserve to be visited with penalty on this issue. As far as second amount is concerned, the ld.AO has made an ad hoc disallowance at 10% of the total administrative expenses. He disallowed a sum of ₹ 73,31,295/-. Out of which, the disallowance upheld by the CIT(A) is ₹ 5,33,909/-. It is an estimated disallowance from a payment of ₹ 7.33 crores. This amount has been disallowed for the reason that complete bills and vouchers could not be produced by the assessee. In our opinion, genuineness of the assessee’s claim to the extent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars Addition made by the ld.AO Additional upheld by the ld. CIT(A) Addition upheld by the Hon ble ITAT. 1. Disallowance of sub-contract exp. 3,41,38,500 87,35,038 86,643 2. Addition of opening stock of WIP 1,30,50,500 Nil Nil 3. Disallowance out of the Mnfg. And Admn. Exps. 73,31,295 5,33,909 5,33,909 4. Disallowance out of transportation charges 31,78,606 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax sought to be evaded by reason of the concealment of particulars of his income or fringe benefit the furnishing of inaccurate particulars of such income or fringe benefits: Explanation 1- Where in respect of any facts material to the computation of the total income of any person under this Act, (A) Such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the CIT to be false, or (B) such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... false by the Assessing Officer or Learned CIT(Appeal); and, (b) where in respect of any fact, material to the computation of total income under the provisions of the Act, the assessee is not able to substantiate the explanation and the assessee fails, to prove that such explanation is bona fide and that the assessee had disclosed all the facts relating to the same and material to the computation of the total income. Under first situation, the deeming fiction would come to play if the assessee failed to give any explanation with respect to any fact material to the computation of total income or by action of the Assessing Officer or the Learned CIT(Appeals) by giving a categorical finding to the effect that explanation given by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee is that, at the first instance, Shri Jethawa had contended that his books were destroyed in flood of 2006, and therefore, he has no details. The second amount is disallowance of ₹ 11,293/- which is in respect of sub-contractor, Pratik Construction. The assessee contended that meager amount was involved, therefore, it did not put much energy in locating this assessee. On due consideration of the above facts, we are of the view that the assessee has made payment of ₹ 70,000/- to Shri Dinesh Jethwa, meaning thereby, this party is a genuine party, it has relation with the assessee, otherwise has no occasion to make a payment of ₹ 70,000/- also. The assessee failed to substantiate the remaining payment. Therefore, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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