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2012 (10) TMI 1055

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..... the assessee - where original return had already been accepted u/s.143(1) before the search had taken place, adhoc disallowance made by AO is not justified - Decided in favor of assessee. - ITA No.4230/Mum/2011 - - - Dated:- 18-10-2012 - SHRI B.R.MITTAL(JUDICIAL MEMBER) AND SHRI RAJENDRA (ACCOUNTANT MEMBER) Appellant by : Shri Girija Dayal Respondent by: Shri J.P.Bairagra OR .....

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..... he assessee has claimed distribution expenses of ₹ 1,02,60,485 in the assessment year under consideration. Assessing Officer asked the assessee to produce bills and vouchers to justify the services rendered. In reply, assessee contended that these expenses are mainly in nature of incentives paid to the customers, who are mostly bakeries. It was stated that various people have been appointed .....

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..... were not acceptable to the AO. AO was of the view that the distribution expenses are not fully verifiable and they are supported by self made vouchers. Accordingly, he estimated an adhoc disallowance of 20% of ₹ 1,02,60,485 which comes to ₹ 20,52,097. Aggrieved, assessee filed appeal before the first appellate authority. Ld CIT(A) held that AO has not brought on record any material to .....

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..... 1) of the Act before the search had taken place. He submitted that adhoc disallowance is not justified. 5. We have considered submissions of ld representatives of parties and orders of authorities below. 6. We observe that AO has made adhoc disallowance while completing assessment u/s.143(3) r.w.s. 153A of the Act, which are not based on any of the seized material found during the course of .....

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