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TMI Blog2019 (11) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... , such expenses are not incurred for the purposes of business. Mere incurrence of expenditure in cash by itself cannot be a ground for denial of genuine claim of the assessee. There are business necessities which warrant the assessee to incur the expenditure in cash, a fact which has been recognized by the legislature and adequate safeguards have been put in place by way of section 40A(3). Though lately there is a policy shift towards digital and cashless transactions which no doubt is a welcome step in the right direction, at the same time, there are certain business exigencies which warrant cash payments. Merely because cash payment has been made is not an indicator that the transaction is non-genuine or bogus or the cash payment ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee against the order of ld. CIT(A), Kota dated 08.01.2018 wherein assessee has taken the following two grounds of appeal. 1. That the Ld. AO grossly erred on Law and facts in making disallowance on adhoc basis out of certain trading Manufacturing expenses @ 5% out of this the ld. CIT(A) allowed ₹ 32,06,63.00/- and grossly erred in sustaining disallowance to the extent of ₹ 100,000/- on lum sum basis. 2. That the Ld. AO grossly erred on Law and facts in making disallowance out of various expenses particularly Miscellaneous expenses further the ld. CIT (A) also erred in sustaining the disallowance out of that ₹ 43,325.00/-. 2. Briefly stated, the facts of the case are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt namely Car Depreciation, Car Insurance, Car Expenses, Telephone Expenditure and Miscellaneous Expenses totalling to ₹ 15,66,877/-, the Assessing Officer held that in absence of any satisfactory explanation submitted by the assessee, most of the expenses are not subject to verification for want of proper vouchers coupled with cash payment. Also, use of car and telephone for purposes other than business cannot be denied. Therefore, to plug any leakage of Revenue 10% of the total expenses were disallowed amounting to ₹ 15,66,88/-. On appeal, ld. CIT(A) held that he is not convinced with the disallowance made in respect of vehicles and telephone @ 10%. The same were deleted. However, in respect of miscellaneous expenses, he restr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lower authorities. 7. We have heard the rival contentions and perused the material available on record. Firstly, we find that it is a clear case of adhoc disallowance of expenses wherein the Assessing Officer has disallowed 5% of the manufacturing expenses, building repair, hamali expenses, machinery expenses and transportation expenses. Further, 10% of car running, insurance and depreciations claim as well as telephone and miscellaneous expenses have also been disallowed. There is no specific finding recorded by the Assessing Officer in terms of any of these expenses having not been incurred for the purpose of business or bogus in nature. The disallowance of expenses have thus been made in the routine manner without point ..... X X X X Extracts X X X X X X X X Extracts X X X X
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