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TMI Blog2021 (6) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... y situated in residential area. Thus, the case law relied by ld AR for the assessee is not helpful to the assessee. Hence, we affirms the order passed by ld. CIT(A). In the result, Ground No.1 of the appeal is dismissed. Adhoc disallowance of cash expenditure - assessee submits that during the assessment, the AO made disallowance @20% of the total expenses made in cash - CIT(A) restricted the disallowance to 10% - HELD THAT:- On appeal before the CIT(A), the assessee made similar submission as made before us. CIT(A) after considering the submission of the assessee and considering the earning of better Net Profit (NP) during the year compared to immediately preceding year, although the Gross Profit (GP Ratio) was slightly lower in this year. The ld. CIT(A) held that in the past, the Gross Profit Ration has been accepted by the Department. On his overall observation, the ld.CIT(A) took his view that it is to be fair and reasonable for both the parties, if the additions are sustained @10% of the expenses. Thus, the ld.CIT(A) allowed 50% relief to the assessee. Before us, assessee vehemently argued that the disallowance sustained by the ld. CIT(A) is on higher side and it may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er consideration. 3. The C.I.T(Appeals) erred in law and on facts in confirming the disallowance of ₹ 86,318/- being depreciation on two motor cars held by the appellant on the allegation of personal use. 2. Brief facts of the case are that assessee is allegedly engaged in the business of cutting and polishing of diamond on job work basis. The assessee filed his return of income on 27.09.2013 for assessment year (AY) under consideration declaring income of ₹ 14,39,800/-. The case was selected for scrutiny. The assessment was finalized on 08.03.2016 under section 143(3) of the Act determining the total income at ₹ 29,61,480/-. The A.O. while passing the assessment order made additions/ disallowances of ₹ 4,20,000/- on account of income from house property , ad-hock disallowance of cash expenditure of ₹ 20,30,720/-, being 20% of total cash expenditure and further disallowance of ₹ 86,318/- on account of depreciation on cars. 3. The Assessing Officer (AO) while passing the assessment order noted that the assessee is having more than one residential house. The assessee owned one residential house and another at Mumbai. The AO worked out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y evidences that the house property situated in Mumbai is used for business purpose. The ld. Sr. DR for the revenue further submits that Lokhandwala Estate, where the house property situated his far away from the Diamonds and Jewellery market situated in and around Opera House, near Marine Lines, Mumbai. The Sr ld. Dr prayed for upholding the action of the AO. 6. We have considered the rival submission of the parties and have gone through the orders of authorities below. The AO made addition under section 23 (a) by taking view that assessee has two residential house, one at Surat and another at Mumbai. The assessee has not offered any income under the head income from house property for taxation, in respect of residential property in Mumbai. The assessee is residing in Surat and carrying its business activities from Surat. In response to the show cause notice, before the AO, the assessee stated that he is frequently visiting Mumbai and used this house for staying at Mumbai, thus the property is used for business purpose for staying at Mumbai. The AO after considering the reply of assessee held that the assessee is carrying its business activity for cutting and polishing of dia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equirement of work force the Manager through a group of workers under his supervision called the workers to work cutting and polishing. In such circumstances, it is not practical to maintain detailed record and the expenses are incurred in cash. In past, the similar expenses were accepted in the regular assessment under section 143(3) of the Act in other assessment years. 8. On the other hand, the ld.Sr.DR for the Revenue submits that assessee made similar submission before the First Appellate Authority (FAA). The FAA after considering the submissions of the assessee reasonably granted relief to the assessee by restricting disallowance to 10%. The disallowance restricted by the ld. CIT(A) is on reasonable basis and that the assessee is not entitled for further relief. It was clearly held by the lower authorities that assessee has not maintained record of expenses and the expenses were incurred in cash 9. We have considered the rival submission of both the parties and have gone through the orders lower authorities. During the assessment, the AO noted that the assessee has debited a total expenses of ₹ 50,76,800/-. ₹ 45,85,100/-on account of cutting and assorting an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ractors within the city for business purpose. The second car is used by assessee for own use of business for meeting and travel from home to office and factory within the city. The third car is used by owner for business purpose to travel from Surat to Mumbai frequently. The ld.AR submits that all three vehicles are used for business purpose. 11. On the other hand, the ld.Sr.DR for the Revenue supported the order of lower authorities. The ld. Sr. DR for the revenue submits that assessee is not maintaining any log book or furnished any corroborative evidence that all three vehicles are used for bossiness purpose. It was submitted that the ld. AR for assessee while arguing the other ground of appeal submits that most of the work are done through contractor. The assessee has not given the details of his office staff who is using the vehicles. The assessee is not having any employee in his office as no salary debited in the profit and loss account. Thus, the contention of assessee that vehicle is used by office staff is not correct. The ld. Sr DR submits that assessee miserably failed to prove that all three vehicles have been exclusively used by assessee for business purpose. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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