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TMI Blog2014 (1) TMI 1705X X X X Extracts X X X X X X X X Extracts X X X X ..... t case, it cannot be said that ad hoc disallowance was made by the Assessing Officer without any basis. Admittedly, the disallowance is made by the Assessing Officer on the basis that huge expenses have been paid by the assessee in cash which is not verifiable and therefore, we confirm the disallowance of ₹ 7 lac. Regarding disallowance of ₹ 2 lacs out of motor running expenses claimed by the assessee at ₹ 29,19,901/- we find that out of total payment of ₹ 29.12 lac, only a payment of ₹ 4.31 lac was made by DD/cheque and the remaining amount was paid in cash. When such a huge amount is incurred in cash, which is not verifiable, the disallowance of a sum of ₹ 2 lacs is not excessive and this is not an ad hoc disallowance without any basis but estimated disallowance out of huge cash expenditure on the basis that such cash expenditure is not verifiable. Therefore, this disallowance of ₹ 2 lac is also confirmed. Regarding disallowance of ₹ 6 lacs out of misc. expenses claimed by the assessee at ₹ 99,38,909/-. Originally the disallowance was made by the Assessing Officer to the extent of 10%, which was restricted by learned CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should have deleted various disallowances as had been made on adhoc basis, as per particulars given below: (i) Loss on account of damages to factory building/shed, due to hailstorm 93,164 Upheld vide Para 1 on the ground that the loss (damage caused by hailstorm) is of capital nature. (ii) Disallowance out of expenses incurred on repair of plant machinery claimed at ₹ 1,71,67,596/- 7,00,000 Adhoc disallowance had been made at ₹ 10,00,000 and the learned first Appellate Authority has restricted the same appeal to ₹ 7,00,000/- vide Para 3 (page 9) of the appellate order. (iii) Disallowance out of motor running expenses claimed at ₹ 29,21,901/- 2,00,000 Against the disallowance of ₹ 2,92,900/- made in the assessment, the same has been restricted to ₹ 2,00,000/- vide Para 3 (page9) of the Appellate order. (iv) Misc. expenses claimed at ₹ 99,38,909 6,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered opinion that when the entire amount of claim made by the assessee was shown by the assessee as income in the year of claim, loss arising due to short realization in the present year after finalization of the claim has to be allowed as business loss and the same is not dependent on this as to whether the claim is in respect of building or in respect of stock. The claim in the present year is on this basis that the income accounted for in earlier year i.e. A. Y.2003-04 is not realized and, therefore, written off in the present year and hence, the same is allowable in the present year. Therefore, the issue raised by the Revenue in its appeal is rejected and ground No. 2 of the assessee is allowed. 7.1 Regarding the three other issues raised by the assessee in ground No. 2 being ad hoc disallowance out of repairs of plant machinery, motor running expenses and misc. expenses of ₹ 7,00,000/-, ₹ 2,00,000/- and ₹ 6,00,000/- respectively, it was submitted by learned A.R. of the assessee that such ad hoc disallowances are not justified and, therefore, the same should be deleted. It was submitted by learned A.R. of the assessee that the books of account were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njustice to the assessee because some cash expenditure is inevitable. In the facts of the present case, it cannot be said that ad hoc disallowance was made by the Assessing Officer without any basis. Admittedly, the disallowance is made by the Assessing Officer on the basis that huge expenses have been paid by the assessee in cash which is not verifiable and therefore, we confirm the disallowance of ₹ 7 lac. 9.1 The third item is regarding disallowance of ₹ 2 lacs out of motor running expenses claimed by the assessee at ₹ 29,19,901/-. In fact, the disallowance was made by the Assessing Officer of ₹ 2,92,900/-. The basis given by the Assessing Officer of making this disallowance is this that the assessee could not substantiate the claim fully with any kind of supporting vouchers. The details are available on page 24 of the paper book. from the same, we find that out of total payment of ₹ 29.12 lac, only a payment of ₹ 4.31 lac was made by DD/cheque and the remaining amount was paid in cash. When such a huge amount is incurred in cash, which is not verifiable, the disallowance of a sum of ₹ 2 lacs is not excessive and this is not an ad hoc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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