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TMI Blog2019 (6) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... r installed within three days from shipping USA to Gurgaon, India. Thus, this ground of appeal is resorted to the file AO to consider the issue afresh after verification of the facts and the evidences about the acquisition of the asset and pass the order in accordance with law. Revenue's ground of appeal is allowed for statistical purpose. Adhoc disallowance @ 25% of various expenses - salary, contribution to various funds, Training Seminar, Travelling Conveyance, Facilities Maintenance, Utility Account Expenses, Freight Expenses and Recruitment Relocation Expenses - revenue submits that during the assessment, the assessee has not substantiated the expenses nor furnished any documentary evidence to substantiate the expenses - HELD THAT:- We have noted that the AO has not disputed the genuineness and admissibility of expenses rather disputed that quantum of the expenses. AO during the remand report has not sought such explanation about the quantum of expenses from the assessee and in the remand report insisted to sustain the addition. In our view, without specifying the genuineness of expenses, the adhoc disallowance is not justified. Addition on account of Business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Member For the Appellant : Shri Awungshi Gimson (CIT-DR) For the Respondent : Shri Salil Kapoor (AR) ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by revenue under section 253 of Income-tax Act ( Act ) is directed against the order of ld. Commissioner of Income-tax (Appeals)- 6, Mumbai [hereinafter referred as ld. CIT(A)] dated 24.04.2017 for Assessment Year 2012-13. The revenue has raised the following grounds of appeal: I. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) [ailed to take the contents of the remand report into consideration before passing the appellate order, is perverse in nature. II. On the facts and in the circumstances of the ease, the Ld. CIT(A) erred in deleting the additions made by the AO on account of cost of fixed assets purchased during the) assessment under consideration at ₹ 5,60,40,964/- III. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the adhoc disallowances @ 25 % made by the AO on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of income under section 1394) on 30.11.2013 declaring total income at ₹ 7,16,97,530/-. The return of income was selected for scrutiny. During the assessment proceedings the assessing officer recorded that despite providing the reasonable opportunity the assessee not furnished the books of accounts and no compliance of various the notices were made. The assessing officer after examining the balance sheet for the year ended on 31/03/2012 made the following disallowances: Sr.No. Particulars Amount/deduction claimed Disallowed by AO (a) Addition to Fixed Assets ₹ 5,60,40,964/- 20% (b) Salary expenses Staff Welfare expenses ₹ 22,89,70,127/- 25% (c) Training Seminar Expenses ₹ 45,35 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y ld. CIT(A). The ld. DR for the revenue submits that ld. CIT(A) that all the additions/disallowance were deleted by ld. CIT(A) without appreciating the remand report. The ld. DR for the revenue prayed that matter may be restored back to the file of ld. CIT(A) to consider the remand report and pass the order afresh. 6. On the other hand, the ld. AR of the assessee supported the order of ld. CIT(A). The ld. AR of the assessee submits that the Assessing Officer passed the assessment without giving sufficient and fair opportunity to the assessee. The assessee was never issued show-cause notice on the various disallowances made by Assessing Officer. The Assessing Officer disallowed various expenses either 100% or on adhoc basis @ 25% without specifying any reason. The ld. AR further submits that during the hearing of appeal, the assessee furnished detailed submissions along with copy of bills and vouchers and also filed application for additional evidence. Before admitting the additional evidence, the ld. CIT(A) examined the assessment record and noted that assessee was only asked to produce the books of account vide order-sheet entry dated 20.01.2015 and no second opp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. On 21.04.2017, the Assessing Officer furnished the remand report. The ld. CIT(A) has recorded the contents of remand report in para-6.1.15 at page no. 23 to 34 of his order. The copy of remand report was furnished to the assessee for their comment. The assessee furnished their response to the remand report. The comments/reply of assessee is recorded by ld. CIT(A) in para-6.1.6 at page no. 35 to 38 of his order. 8. We have noted that after recording the contents of remand report and the reply/objection of assessee, the ld. CIT(A) proceeded to adjudicate the various other grounds of appeal raised by assessee. In our view, the ground of appeal raised by Assessing Officer/revenue has no leg to stand that remand report was not considered by Assessing Officer. In the result, ground no.1 of the appeal is dismissed. 9. Ground No.2 relates to deleting the addition on account of fixed asset. The ld. DR for the revenue supported the order of Assessing Officer. The DR further submits that ld. CIT(A) accepted the explanation of assessee despite bringing adverse remand report in respect of fixed asset by the Assessing Officer. The ld. DR for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance of ₹ 97,68,069/-. The second addition to fixed asset relates to furniture fixtures. The Assessing Officer in his remand report accepted that all invoices is duly verifiable and certified by Auditors. For addition to office equipments, the Assessing Officer in his remand report stated that on verification, it was noted that equipments of ₹ 48,16,877/- were purchased in Financial Year 2008-09. Further, Polycom Inc. invoice dated 16.12.2011 for ₹ 49,92,982/- has been put to use on 15.12.2011. The shipping of goods/asset would have taken a reasonable time from USA to India. The assessee has surprisingly used the goods prior to purchase. Similarly, the goods purchased from the same consignee dated 28.12.2011 for ₹ 6,70,446/- have been put to use on 31.12.2011, which shows that goods were shipped and installed in Gurgaon, India within less than three days which is unbelievable. The ld. CIT(A) deleted the entire addition holding that the Assessing Officer has given his remand report to justify the high pitch assessment. Before us, the ld. AR of the assessee has not substantiated as to how there was a mismatch of date. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Before the ld. CIT(A), the assessee furnished detailed submission along with documentary evidences as stated above, the submission and the documentary evidences of assessee was forwarded to the Assessing Officer for his remand report. The Assessing Officer furnished his remand report on 21.04.2017. The ld. CIT(A) after perusing remand report concluded that the addition on the presumption that no bills or voucher or books of account produced cannot be sustained on adhoc basis. The Assessing Officer made disallowance without specifying any specific incidence, such disallowances are not sustainable as per the provisions of law. 13. We have independently examined the disallowances. The Assessing Officer made 25% disallowance on account of salary, contribution to various funds and workmen and staff welfare. During the remand report, the assessee furnished details of salary and allowances, furnished copy of Form-16 issued to certain employee as supporting evidences for their salary paid during the year. The assessee also furnished the break-up of contribution made to various funds. The assessee also furnished details of gratuity, PF contribution, PF Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer has not specified any discrepancies and considering the remand report deleted the entire addition/disallowance. 15. We have considered the submission of both the parties and have gone through the orders of lower authorities. The Assessing Officer made the addition by making 100% disallowance holding that no proof, bill or voucher was produced. For business promotion and advertisement Expenses and that no TDS under section 194C was deduced. For Professional Fees Travelling Expenses, the Assessing Officer concluded that no details were furnished. For Outsource Expenses, the assessee has not deducted TDS. Therefore, the Assessing Officer has made 100% addition on these expenses. The ld. CIT(A) deleted the entire addition holding that no discrepancies in the vouchers and books of account was noticed by Assessing Officer and that all these facts were verified from the assessment record that all the vouchers and books were produced before Assessing Officer. 16. We have examined all these additions/disallowances. For legal professional expenses, the Assessing Officer in his remand report stated that assessee submitted part wise details of l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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