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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 ..... lowance on estimate basis, that the audited accounts of the assessee were available to the AO and in the audit report there was nothing that could lead to the conclusion that the assessee had not incurred expenditure claimed in the books of account, that similar kind of expenses were disallowed in the earlier years by the AO were deleted by the Tribunal. We are of the opinion that the AO cannot make any addition/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 acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : Sh. D.K. Jain, Sr. DR. For the Assessee : Sh. G.S. Agrawal, C.A. ORDER Per Rajendra, AM Challenging the order dt. 22.11.2010 of the CIT(Appeals), Raipur, the Assessing Officer (AO) has raised following Grounds of Appeal: 1. Whether in law and on facts circumstances of the case, the CIT(A) was justified in deleting the disallowance of Rs.5,00,000/- made by the AO out of material expenses claimed by the assessee. 2. Whether in law and 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 retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the expenses were not fully supported by the proper bills. Finally, an amount of Rs.5,00,000/- was disallowed out of those expenses for want of complete verification. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority (FAA).It was argued before him that all the expenses were fully verifiable, that details were produced before the AO, that he has not detected any particular defect in any of the records maintained by the assessee, 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 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d all the necessary details during the assessment proceedings, that the AO made a disallowance of Rs.5,00,000/- on estimate basis, that the audited accounts of the assessee were available to the AO and in the audit report there was nothing that could lead to the conclusion that the assessee had not incurred expenditure claimed in the books of account, that similar kind of expenses were disallowed in the earlier years by the AO were deleted by the Tribunal. We are of the opinion that the AO cannot make any addition/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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO disallowed Rs.10,00,000/- out of the labour and contingency expenses, as stated earlier. 7. During the appellate proceedings, the assessee argued that it had maintained muster rolls and wages sheets, that these documents contained attendance of labourers and signatures/thumb impressions in respect of payments, that these books were produced before the AO for verification, that he had not pointed out any specific reason to disallow the labour expenses. After considering the assessment order and the submissions 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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