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TMI Blog2016 (11) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... tax (Appeals) has examined expenses in detail and found that the increase was mainly on account of the of octroi paid to Municipal Corporation of Mumbai. We find that the assessee has duly explained the increase in the expenses under both the heads as compared to the preceding assessment year before the learned Commissioner of Income-tax (Appeals). Further, we do not find any strength in the ground of the Revenue that learned Commissioner of Income-tax (Appeals) has not exercised the co-terminus power of the Assessing Officer and did not examine whether the expenses were incurred wholly and exclusively for the purpose of business. In our view, the learned Commissioner of Income-tax (Appeals) has examined the details of the expenses and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. iv. That the Ld. CIT(A) has erred in not giving any finding despite the fact that he was exercising co-terminus jurisdiction with A.O. in term of explanation of section 251(1) of the I.T. Act. v. That the order of the Ld. CIT(A) being erroneous in law and on facts which needs to be vacated and the order of the A.O. be restored. vi. That the appellant craves leave to add or amend any one or more of the ground of the appeal as stated above as and when need for doing so may arise. 2. The facts in brief of the case are that a search and seizure action under section 132 of the Income- tax Act, 1961 (in short the Act ) was conducted in the case of the assessee on 15/09/2009. A notice under section 153A of the Act was is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer has disallowed expenses with following remarks: Assessee has shown ₹ 7443522/- as CWC - NSEZ Expenses for the current year against ₹ 2695650/- for preceding year. As explained this expense amount is incurred for transportation of goods at SEZ. During the year the sale amount has increased by 6.74%, accordingly this expense shall also increase by approximately such percentage. Keeping in account the inflation and other factors ₹ 1826474/- is disallowed during the year. On same grounds Freight and forwarding Expenses incurred for carriage of goods amounting to ₹ 1825262/- is disallowed . 6. The learned Commissioner of Income-tax (Appeals), has deleted the disallowance with following observatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Municipal Corporation. With above submission the appellant has pleaded that the above two additions made by the AO be deleted. On careful consideration of submission made by the appellant, facts brought out by the AO in assessment order and relevant material available on records I find that AO has made above additions without going into the details of above expenditures appearing in the audited balance sheet filed by the assessee. The AO has simply made estimated addition on ad-hoc basis without any explanation or justification in this regard. The AO has also not deliberated the basis of arriving at the figures of disallowance under above heads. I also find that AO has failed to give show cause notice to the appellant before making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Commissioner of Income-tax(Appeals), on the other hand, examined the details of the expenses and in respect of first disallowance found that in the preceding assessment year vaulting/warehousing expenses were shown separately, whereas in the year under consideration, the said expenses are clubbed with expenses under the head CWC-NSEZ and, therefore, the increase in expenses was found to be justified by the learned Commissioner of Income-tax (Appeals). Similarly, under the head freight and forwarding expenses , the learned Commissioner of Income-tax (Appeals) has examined expenses in detail and found that the increase was mainly on account of the of octroi paid to Municipal Corporation of Mumbai. We find that the assessee has duly ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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