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TMI Blog2021 (1) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... ation from ₹ 1,33,38,36,680/- for assessment year 2012-13 to ₹ 1,76,28,64,861/- for assessment year 2013-14 which demonstrate expansion in the business operation of the assessee company. It is also undisputed fact that similar rent expenses were incurred by the assessee in respect of same property in subsequent year 2014-15 and 2015-16 and the Assessing Officer had allowed the same while framing scrutiny assessment year u/s. 143(3) of the Act. In the light of the above facts and circumstances, we consider that the action of Assessing Officer in disallowing the rent expenses in the year under consideration is not justified - Decided in favour of assessee. Disallowance u/s. 69C - assessee had purchased cutting machine but no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act was issued on 1st Sep, 2014. The assessee is engaged in the business of trading in non-ferrous metals during the year under consideration. The assessment u/s. 143(3) of the Act was finalized on 11th March, 2016 and total income was assessed at ₹ 2,89,38,360/-. The ld. counsel has contested two issues in grounds of appeal pertaining to disallowance of rent expenses of ₹ 8,80,000/- of premise taken on rent at Mumbai and disallowance of ₹ 10,000/- as unaccounted expenses towards freight on purchase of machine from Surendranagar. The relevant facts pertaining to the aforesaid issues are discussed as under while adjudicating the grounds of appeal. Ground No. 1 (Disallowance of rent expenses of ₹ 8,80,000/-) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee company for the purpose of using by the directors of the company. The ld. counsel also submitted that frequent stay of directors of the assessee company in a hotel was found to be a costly option hence assessee took a residential premises on rental basis in Mumbai for its directors out of commercial expediency. The ld. counsel has also placed reliance on the decision of Jurisdictional High Court of Gujarat in the case of Sayajit Iron Engg. Co. vs. CIT-253 ITR 749 (Guj). The ld. counsel also submitted that the similar rent expenses incurred by the assessee in subsequent year i.e. assessment year 2014-15 and 2015-16 were duly allowed by the Assessing Officer while framing scrutiny assessment u/s. 143(3) of the Act. On the othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for the purpose of using for all the directors of the company and it was not taken for personal living purpose of any particular director. It is also observed that after deletion of section 37(3) w.e.f. 01-04-1998 guest house expenses are allowable under the act. Looking to the revenue from operation of the assessee company to the amount of ₹ 1,33,38,36,680/- for assessment year 2012-13, the impugned expenses of ₹ 8,80,000/- was only 0.05% of the total revenue from operation and there was increased in the revenue from operation from ₹ 1,33,38,36,680/- for assessment year 2012-13 to ₹ 1,76,28,64,861/- for assessment year 2013-14 which demonstrate expansion in the business operation of the assessee company. It is als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 10,000/- on presumption basis without considering the fact that assessee has used its own tempo for the purpose of transportation of the purchased machinery. On the other hand, the ld. Departmental Representative has supported the order of lower authorities. 10. Heard both the sides and perused the material on record. During the course of assessment , the Assessing Officer noticed that the assessee had purchased machinery for ₹ 2,69,387/- from from Mistry Laxman Kadva Machines Pvt. Ltd., Sundranagar and no freight for transportation of the said machinery had been accounted for by the assessee. The Assessing Officer had not accepted the submission of the assessee that it had used its own tempo to get the delivery of the purc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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