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TMI Blog2017 (10) TMI 1012X X X X Extracts X X X X X X X X Extracts X X X X ..... rt this finding of ld. CIT(A), therefore, after hearing both the sides, it is of the view that purchases of bardana in the second half of the financial year relevant to the assessment year were inflated and the disallowance made by the Assessing Officer was justified which has been rightly sustained by the ld. CIT(A). - Decided against assessee Disallowance of telephone expenses, travelling expenses and vehicle and running expenses - CIT(A) has sustained 10% of the expenses debited in the books of account of personal use - Held that:- Assessee was not able to controvert the findings recorded by the ld. CIT(A). There was personal use of telephone, travelling and vehicle running, therefore, find no reason to interfere with the findings of the ld. CIT(A), the same is hereby uphold. - Decided against assessee - ITA No. 896/JP/2016 - - - Dated:- 10-10-2017 - SHRI BHAGCHAND, ACCOUNTANT MEMBER For The Assessee : Shri S.L. Jain (Adv) For The Revenue : Shri R.A. Verma (Addl.CIT) ORDER PER: BHAGCHAND, A.M. This is an appeal filed by the assessee emanates from the order of the ld. CIT(A)-5, Jaipur dated 25/07/2016 for the A.Y. 2010-11. 2. The assessee is der ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bited brokerage (dalali) expenses of ₹ 10,46,725/-. The Assessing Officer asked to produce four persons namely Sh. Manoj Kumar Agarwal, Sh. Shyam Agencies, Sh. Dinesh Kumar Khator and Sh. Satish Machiwal. The assessee produced only two persons namely Sh. Manoj Kumar Agarwal, and Sh. Satish Machiwal. The Assessing Officer made the addition, which has been sustained by the ld. CIT(A) by holding as under: 2.3. I have considered the facts of the case, the assessment order and the submission of the A/R, the brief facts are that the assessee is engaged in trading and manufacturing of sugar products, for which he purchases damaged sugar which he converts into sugar products and sells the same. The assessee claimed to have paid brokerage on purchases as well as sale of sugar and sugar products. The AO asked the assessee to produce four specific brokers to whom substantial brokerage had been paid. The assessee could produce only two of them viz Sh. Satish Machiwal and Sh. Manoj Agarwal. Out of these two brokers, only Sh. Satish Machiwal was paid brokerage on purchases as well as sales. The statement of the two brokers was recorded. In his statement, Sh. Satish Machiwal stated in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. From the above facts, it does not appear that Sh. Machiwal has effected any sales for the assessee. Also considering the non-production of two other brokers before the AO, it is seen that the assessee has been unable to prove the expenses on sales brokerage. Accordingly, the disallowance of brokerage claimed on sales is justified and the addition of ₹ 4,08,223/- is upheld. 4. Now the assessee is in appeal before the ITAT. At the time of hearing, the ld AR of the assessee has submitted that the assessee could produce two persons namely Sh. Manoj Kumar Agarwal, and Sh. Satish Machiwal before the Assessing Officer, who had accepted the receipt of Dalali for the work done on behalf of the assessee. The revenue authority s contention that these persons were not keeping details of the payment received, cannot be adversely taken against the assessee as the assessee is not responsible for the maintaining the books of account of these dalals to whom the dalali was paid. He has further submitted that namely Sh. Satish Machiwal has specifically stated that he has worked for the assessee as broker during the relevant financial year. Further Shri Manoj Agarwal, whose statement wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at around 90% of bardana purchase is in the second half of the financial year, despite the fact that sales figure in the corresponding period is approx. 50% of annual sales. Thus bardana purchases appear to be inflated in the second half of the year. Moreover, being made in cash, these expenses are amenable to inflation particularly when the bills/letterheads are similar indicating that the concerned parties might have acted in concert with the assessee. The assessee has also not discharged the burden of proving the said expenses. Considering all these facts, disallowance of 20% of the packing expenses, made by the AO is justified and is accordingly upheld. 8. I have heard both the sides on this issue. The ld. CIT(A) s finding that the bardana purchases for the month of April, 2009 was ₹ 26,614/- and thereafter the purchases were only in the month of October while the sales affected during this period were around 50% of the annual sales. The ld. CIT(A) has recorded that the purchases appears to be inflated in the second half of the year. Before the Bench also the ld AR was unable to controvert this finding of ld. CIT(A), therefore, after hearing both the sides, I am of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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