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TMI Blog2019 (10) TMI 924X X X X Extracts X X X X X X X X Extracts X X X X ..... parately claimed fuel expenses, delivery expenses of ₹ 2,85,206 in its P L account, therefore, even if the said claim of loss on sale of vehicle is wrongly or mistakenly shown instead of delivery expenses, it cannot be accepted when the assessee has already claimed the delivery and fuel expenses separately. Hence, we do not find any error or illegality in the order of the ld. CIT(A) qua this issue. Disallowance of 10% of certain expenses - A.O. has disallowed 10% of the telephone expenses on the ground that the assessee did not maintain any call register and in absence thereof, personal element cannot be ruled out - HELD THAT:- Once the telephone expenses are verifiable from the telephone bills itself then this cannot be a case of unverifiable expenses. Further the personal element is only suspected by the A.O. and not found. Even otherwise, when the telephones are used in the business premises of the assessee and the expenses are verifiable from the telephone bills itself then the same cannot be disallowed on mere suspicion. Travelling expenses were also disallowed as 10% on the ground of personal element. The A.O. has not doubted the expenditure incurred by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .37% declared in Mustard Seeds and yield ratio of 28.07% as against 27.35% declared in Tarameera Seeds and thus, thereby making addition of ₹ 300,000/-. The additions so made and partly confirmed being contrary to the provisions of law and facts of the Case and contrary to the submissions evidences available on record hence, the same kindly be deleted in full. 2.2 The impugned addition seriously racks jurisdiction and hence, the same kindly be deleted in full. 3. ₹ 2,40,217/-: The Id. CIT further erred in law as well as on the facts of the case in confirming the disallowance made by the AO out of the expenditure incurred on transportation expenses though wrongly and mistakenly named as loss on sale of vehicle Ignoring the submissions/clarification furnished before her. The disallowance so made being contrary to the provisions of law and facts of the case and contrary to the submissions evidences available on record. Hence, the same kindly be deleted in full. 4. ₹ 90,600/-: The Id. CIT also erred in law as well as on the facts of the case in fully confirming the disallowances made by the AO out of the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undnuts. The assessee filed its return of income on 26/09/2012 declaring total income of ₹ 54,63,390/-. However, the assessment was completed at ₹ 97,68,310/- by making additions by the A.O. on account of low yield of oil from seeds i.e. from groundnuts, mustard and Tarameera seeds as well as certain expenses were also disallowed on ad hoc basis. The assessee challenged the action of the A.O. before the ld. CIT(A), who has restricted the trading addition made by the A.O. of ₹ 18,74,102/- on account of low yield ratio to ₹ 3.00 lacs. The assessee is aggrieved by the order of the ld. CIT(A) sustaining the trading addition of ₹ 3.00 lacs. 4. Before the Tribunal, the ld AR of the assessee has submitted that the assessee declared yields of groundnut oil at 27.90%, mustered oil at 34.37% and Tarameera oil at 27.35%. The A.O. asked the reasons to the assessee for downfall in the yield and production for the year under consideration in comparison to the previous years. The ld AR has submitted that the assessee has duly explained the reasons for low yield for the year under consideration in comparison to the earlier years and since the differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taramira 29.23% 27.35% Yield Chart Ground Nut Seeds (In KG) Mustard Seed (In Kg.) Taramira Seed (In Kg. Oil 1170204.600 27.90% 134646.040 34.37% 1185437.500 27.35% Cake 1991570.000 47.48% 255040.000 65.11% 3131509.00 72.42% Shortage 1032476.400 24.62% 2015.960 00.52% 10304.900 00.23% Total 4194251.000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d ratio of similar business carrying out same job at same station in the same conditions. Here I am of view that if the same businesses with same raw material even the party from whom raw material was purchased was, more or less same; carrying out function at the same station should yield more or less the same result and; this fact pointed out by the AO cannot be neglected. Therefore, respectfully following ratio laid down case laws and facts as discussed above I hereby restricted the addition of ₹ 3,00,000/-, the appellant gets relief of ₹ 15,74,102/-. Accordingly, the ground is treated as partly allowed. Thus, the ld. CIT(A) has accepted the contention of the assessee that a trading addition cannot be made without pointing out defects in the books of account. Though, in the case in hand, the addition made by the A.O. is not in the nature of trading addition but it is the addition on account of low production of oil from the oil seeds in comparison to the earlier years. We find variation in the yield ratio is very meager and in some of the cases it is less than 1%. Once the difference is very negligible which can be due to various factors and reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a resultant loss of ₹ 2,40,217/-, which was claimed by the assessee and the same was disallowed by the AO. During the course of appellate proceedings the AR of the appellant stated that in many cases the assessee had to deliver the goods at the door step of the buyer and hence that figure therefore represents the delivery charges in the shape of diesel and other related expenses which were incurred on the trucks and wrongly shown as loss on sale of vehicle. However, I am not inclined to agree with this argument of the AR of the appellant. The appellant had separately claimed fuel expenses, delivery expense for ₹ 2,85,206/- in its Profit and Loss Account and further this truck also was not appearing in the fixed asset chart of the appellant or if it had been hired from partners then also no documentary evidence for the same had been provided. The appellant is just trying to cover up this entry as clerical mistake, therefore the loss of ₹ 2,40,217/- arising on the sale of the vehicle could not be allowed and had rightly been disallowed by the AO. Thus in light of the aforesaid observations the ground raised by the appellant is hereby dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee has produced only self-made vouchers then in absence of supporting documentary evidence, 10% disallowance of expenditure is justified. Regarding other office expenses, the assessee has shown office expenses of ₹ 2,85,200/- and most of these were paid in cash and supported by the self-made vouchers. However, it is to be noted that if the expenditure is not found to be excessive and it is inevitable for the business of the assessee then the petty expenses incurred by the assessee on day to day basis is bound to be incurred in cash and without any vouchers from the other side due to such a small and petty expenses. Accordingly, once the said expenditure is not found to be excessive having regard to the nature of business and volume of the business of the assessee then an ad hoc disallowance is not justified. Accordingly, in view of the above facts and circumstances, except 10% of building repair and maintenance expenses, all other disallowances made by the A.O. and sustained by the ld. CIT(A) are deleted. 11. In the result, appeal of the assessee is allowed in part. Order pronounced in the open court on 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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