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TMI Blog2022 (5) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer is directed to re-compute the same. In the result, ground No.1 is partly allowed. Disallowance of renovation expenses - CIT(A) confirmed the action of Assessing Officer by taking view that there is no debit balance in bank statement of assessee - HELD THAT:- We find that assessee has placed on record the invoice of Shri Hari Corporation, showing the payment of Rs.2,06,401/- vide cheque No.178 drawn in favour of Laxmi Vilas Bank. We find that assessee has also furnished invoice of cement confirmation. The assessee also filed the confirmation of work undertaking by Naklang Construction. We also find that payment of such repair works was made through account payee cheque on 05.12.2015 which is duly reflected in the account statement of assessee. In view of aforesaid facts, we find that assessee has substantiated the expense since the repairs of small modification carried out at the premises are small scale repair which cannot be classified with capital expenditure. Therefore, Ground No.2 of the assessee is allowed. The Assessing Officer is directed to re-compute the same. - ITA No. 114/SRT/2021 - - - Dated:- 6-5-2022 - Shri Pawan Singh, Judicial Member And ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r noted that bill shows at Sl. No.(iii) being invoice No.312 is issued on 25.05.2015, however bill mentioned at Sl.No.(iv) having invoice No.311 is issued on 26.05.2015 and bill mentioned having Sl.No.(ii) invoice No.313 was issued on 24.05.2015. The Assessing Officer noted that bills No. are in ascending form and dates are in descending form and the bills does not have any TIN, no telephone, no signature of seller. Accordingly, the purchases expenses of Rs.3,60,250/-, that is entire purchase was disallowed. 3. The Assessing Officer further noted that assessee has debited expenses of Rs.2,06,400/- on account of construction/ repair. On verification of details, Assessing Officer found that assessee furnished bills for purchase of cement. On show cause notice, assessee submitted that they have purchased cement for renovation of staff room, toilet and some minor renovation. No purchase bills for materials required for renovation of construction work as it was executed by contarctor. The Assessing Officer was further viewed that expenses incurred by assessee as capital expenditure and was to be added to the capital asset. The assessee has treated such expenditure as revenue expendit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more than two occasions. On perusal of record, it reveals that assessee was duly served notice of hearing of appeal through authority letter on Shri Sameer Shah of M/s SNK Co. CA is also filed on record. On further perusal, we find that the assessee has furnished certain documentary evidence and written submission on record on both the grounds of appeal. Therefore, we decide to adjudicate the appeal on the basis of written submission on record and after hearing the submission of Ld. Senior Departmental Representative (Sr. DR) for the Revenue. 7. Ground No.1 relates to disallowance of purchase of Rs.1,80,125/- being 50% of purchase of Rs.3,60,250/-. The assessee in its written submission submitted that assessee has shown purchase from Milan Lace during the year under consideration but no purchase in earlier or subsequent year was made from such party. The assessee has also furnished gross profit and net profit ratio for earlier and subsequent year. In assessment year 2015-16, the assessee has shown gross profit @ 9.18% and net profit 0.49% respectively and in assessment year 2016-17 i.e. for the year under consideration, the assessee has shown gross profit @ 13.42%. For assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayee cheque. The assessee further stated that not only purchase made by account payee cheque even the payment to contractor is also made through account payee cheque. Merely, Ld CIT(A) could not find the payment in bank statement, disallowance is not sustainable. On the alternative disallowance by treating as capital expenditure, the assessee stated that the expenditure was made on small modification to changing room for the workers, toilet repair and replacement of broken flooring in the factory shed which are not in the nature of capital expenditure. 11. On the other hand, Ld. Sr.DR for the Revenue supported the order of Assessing Officer. 12. We have considered the written submission filed by assessee and the submission of Ld. Sr. DR for the Revenue and perused the orders of lower authorities carefully. We find that the Assessing Officer made disallowance on the ground that assessee has not furnished any details except furnishing details of cement purchasing for renovation of staff room, toilet and other minor renovation. The Assessing Officer also treated the said expenditure as capital account in nature. The Ld. CIT(A) upheld the addition by taking view that he could not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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