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TMI Blog2021 (4) TMI 249X X X X Extracts X X X X X X X X Extracts X X X X ..... eyes of law and the same are hereby directed to be deleted. Appeal of the assessee is allowed. - ITA No. 600/JP/2019 - - - Dated:- 30-3-2021 - Shri Sandeep Gosain, Jm And Shri Vikram Singh Yadav, Am For the Assessee : Sh. Siddharth Ranka (Adv.) Sh. Saurav Harsh (Adv.) For the Revenue : Smt. Runi Pal (Addl. CIT) ORDER PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A), Kota dated 11.02.2019 wherein he has confirmed various additions made by the Assessing Officer relevant for A.Y 2014-15. 2. The relevant facts as emerging from the records as well as the findings of the ld. CIT(A) which are under challenge before us read as under:- Ground No. 3: In the profit loss account, diwali expenses of ₹ 38,282/ - has been debited. On examination, it is noticed that these expenses are not properly vouched or are supported by self-made vouchers only. Further, these expenses were met by cash payments. Therefore, these expenses are not subject to verification. Therefore, the assessee was asked vide order sheet entry dated 06.09.2016 to show cause as to why necessary disallowance may not be made o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ination, it is noticed that these expenses are not properly vouched or are supported by self-made vouchers only. Further, these expenses were met by cash payments. Therefore, these expenses are not subject to verification. Therefore, the assessee was asked vide order sheet entry dated 06.09.2016 to show cause as to why necessary disallowance may not be made out the claim so made. The assessee has not submitted anything specific in this regard. As stated above, the expenses claimed by the assessee are not subject to verification for want of proper vouchers and due to cash payments. Therefore, it is considered to disallow 5% of the expenses of ₹ 11,93,547/ -, which comes to ₹ 59,677/ -, is disallowed to cover up any leakage of Revenue on this account. As regards the Ground no 5 related to disallowance made from Material shifting expenses, I have gone through assessee's submission and AO's findings. Looking to the nature of these expenses, some disallowance for nonbusiness unverified portion in the total claim was justified. However, the same has to be reasonable. The disallowance is already restricted to only 5% of the total claim which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on this account. I have gone through assessee s submission and AO s findings. As regards the Ground no 7, Considering the nature of the expenses, quantum of the disallowance made and the reasons given by the AO, the disallowance is being restricted on a more reasonable basis to ₹ 50,000/- to take care of any pilferage due to cash and non business related expenses. The balance disallowance is to be deleted. This ground of appeal is treated as partly allowed. 3. During the course of hearing, the ld. AR submitted that the assessee is engaged in the business of processing exports of stones. During the year under consideration, it has reported a total turnover of ₹ 25,10,35,845/- disclosing gross profit of ₹ 9,46,15,152/- thereby reporting gross profit of 37.69% which is amongst the highest top three in the industry. It was submitted that various additions have been made by the Assessing Officer for the reason that the expenses have been met by cash payment. It was submitted that given the nature of the assessee s business, it is but natural that the assessee is required to incur certain expenditure through cash in terms of making payment toward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been confirmed by the ld. CIT(A). She accordingly supported the order and findings of the lower authorities. 5. We have heard the rival contentions and perused the material available on record. Firstly, it is noted that the Assessing Officer has disallowed 5% of the loading and unloading expenses which have been deleted by the ld. CIT(A). Though, the same is not the subject matter of present dispute, however, it is relevant to consider the findings of the ld. CIT(A) wherein he has stated that the AO has not been able to bring examples of specific disallowable expenses among this category and if the books of accounts were not reliable because of cash or self made vouchers, he should have rejected the same u/s 145(3) and in absence of the same, he is satisfied with the explanation given by the assessee and the disallowance so made by the Assessing Officer appears to be unnecessary and the same was directed to be deleted. However, regarding other disallowances made by the Assessing Officer which have been sustained by the ld. CIT(A) and are subject matter of dispute before us, though, the finding of the Assessing Officer are more or less similar as in the case of disallowances of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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