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TMI Blog2014 (12) TMI 1397X X X X Extracts X X X X X X X X Extracts X X X X ..... on facts & circumstances of the case, the CIT(A) was justified in deleting the disallowance of Rs.10,00,000/- made by the AO out of labour & contingency expenses claimed by the assessee. Assessee-firm is a civil contractor and builders. It filed its return of income on 29.10.2007 declaring total income of Rs.32,34,121/-. The AO completed the assessment on 29.05.2009 determining the income of the assessee at Rs.49,61,402/-. 2. First ground is about deleting disallowance of Rs.5,00,000/- made by AO out of material expenses claimed by the assessee. During the assessment proceedings, the AO found that the assessee had shown contract expenses of Rs.10.36 crores. He found that the assessee was maintaining site-wise ledger account. On verific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that ad hoc disallowance of Rs.5,00,000/- was not justifiable. After considering the submissions of the assessee and the assessment order, the FAA held that the AO had not brought any material on record before making the disallowance, that ideal way to make disallowance was to do so after giving opportunity to the assessee on a particular issue, that without giving any reason the AO had made a lump sum disallowance of Rs.5,00,000/- on just estimate basis, that the Act did not confer such powers to the AO to make any disallowance without assigning proper reasons. The FAA further found that while deciding the appeal for the assessment year 2000-01 on 11.11.2005 (ITA 45/Nag/2004-AY.2000-01),the Tribunal had deleted similar type of disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition/disallowance without giving proper reasons. As a representative of the State, he is duty bound to pass a reasoned order. A reasoned order needs basic facts their analysis and conclusion. In the case under consideration, estimated disallowance has been made without assigning proper reasons. The AO has not rejected the books of account and has not pointed out any defects in the books. In these circumstances, in our opinion, he was not justified in making the disallowance. Therefore, confirming the order of the FAA, we decide the first ground of appeal against the AO. 6. The next ground of appeal is about disallowance of Rs.10 lacs out of labour and contingency expenses of Rs.4.31 cores. During the assessment proceedings, the AO foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions of the assessee, the FAA held that the assessee was running regular books of account and same were duly audited, that the AO has not found any defect in the accounts or method of accounts followed by it, that he had not pointed out any specific defect in the books of account maintained by the assessee, that no addition could be made on the basis of estimation. Relying upon the order of the Nagpur Bench of Tribunal pronounced in the case of Anant Rice Industries (ITA No. 280/Nag/2008 dated 26.08.2008), he held that lump sum disallowance could not be made without collecting some evidences. 8. Before us, the DR supported the order of the AO. The AR of the assessee stated that the business of the assessee was widely spread, that it h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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