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TMI Blog2022 (9) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... y on the assessee stood discharged, and it is now for the authorities below to bring out specific defects in the books of accounts as well bills and vouchers furnished by the assessee after making necessary enquiries and investigation and the authorities are to point out which expenses are not allowable and reasons thereof, which has not been done by authorities below in this case. Same is the fate of other expenses on account of staff welfare, repairs and maintenance, telephone and mobile expenses and travelling and conveyance, which disallowance also stood deleted. - Decided in favour of assessee. - ITA No. 01/VNS/2021 - - - Dated:- 12-9-2022 - Shri Vijay Pal Rao, Judicial Member And Shri Ramit Kochar, Accountant Member For the Assessee : Shri O.P. Shukla, Adv. Sh. Abdhesh Dubey, Advocate For the Revenue : Shri A.K. Singh, Sr. DR ORDER PER SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER: This appeal, filed by assessee, being ITA No.01/VNS/2021, is directed against the appellate order dated 02.03.2020 passed by ld. Commissioner of Income-tax(Appeals), Allahabad (hereinafter called the CIT(A)) in Appeal No. CIT(A), Allahabad /10275/2016-17, for assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not enough for making the disallowance while relying on the decision of Jodhpur Bench of the Tribunal in the case of Surface finishing Equipment 2SOT 233. Hence the aforesaid disallowance is liable to deleted. In the case of U.P. TOBACCO PRODUCTS PVT. LTD. The Hon'ble ITAT Allahabad has given finding that disallowance out of expenses on basis of general observation without pointing out defects not justified. In the case of CHANDRA CONFECTIONERY PVT. LTD. The Ld. ITAT Lucknow has given following observation: The assessing officer making add-hock disallowance without assigning any reasons without pointing any defects not justified additions not sustainable. The aforesaid case is covered by the order of Commissioner of Income Tax (A) Allahabad vide his order dated 17.02.2006 in the case of M/s J.P. Yadav, on the basis of aforesaid decision of the ITAT Allahabad Lucknow bench has observed that the Add-hock disallowance out of expenses were not specified item pointed that the disallowance made are bogus and not justified. 4. Because the appellant crave for a right to raise any additional ground during the course of hearing of the case. 5. Because the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re are two grievances of the assessee, firstly that ld. CIT(A) upheld the addition of Rs. 2,15,000/- by disallowing Material expenses claimed by assessee as business expenses, and secondly ld. CIT(A) upheld disallowance of certain expenses claimed by the assessee viz. staff welfare expenses to the tune of Rs. 6930/-, Repair and Maintenance Expenses of Rs. 28,000/-, Telephones and Mobile Expenses to the tune of Rs. 18,500/- and Travelling and Conveyance Expenses to the tune of Rs. 22,010/- . 4a. The AO observed in its assessment order dated 02.11.2016 that the assessee has filed replies along with copy of account of direct expenses as well indirect expenses and copy of challan paid, copy of service tax with copy of account, copy of account of labour charges and material expenses with bills and vouchers for verification. The AO observed that books of accounts were produced by the assessee, which were test checked by the AO. The first issue agitated by assessee in this appeal concerns with disallowance of Rs. 2,15,000/- on account Material expenses which could not be verified by the AO . The AO observed that the assessee has claimed Material Expenses to the tune of Rs. 7,26,25,51 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produce bills and vouchers in support of expenses claimed in books of accounts. AO while examining them found that some of the vouchers are not properly supported or vouched in the books of accounts. AO though did not specify these expenses in the order but the addition made is very specific amount and not adhoc on a specific percentage basis. 'Material Expenses were claimed of Rs.7,24,10,516/- and AO mentioned small amount of Rs. 2,15,000/ as not verified. In absence of evidence Rs. 2,15,000/- was disallowed. Appellant has submitted that these are adhoc disallowance that is not permissible. I disagree with appellant's contention as the addition is of a specific amount that was observed by AO while examining the books of accounts and not of an adhoc amount. It is agreed though that while making the additions AO should pass a more speaking order. The addition made by the AO is hereby confirmed. This ground is dismissed. ******** ******** Decision: I have gone through the facts and the written submissions filed along with the details filed enclose therein. During the remand proceedings appellant was asked to produce bills and vouchers in supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial expenses of Rs. 2,15,000/- which could not be verified by the AO as well by ld. CIT(A), as complete details were filed before AO as well ld. CIT(A). The learned counsel for the assessee relied upon the decision of Hon ble Madras High Court in the case of V.C. Arunai Vadivelan v. ACIT(2021) 128 taxmann.com 195(Mad.). The ld. counsel for the assessee submitted that adhoc disallowance of expenses were made by the authorities below viz. towards telephone expenses, staff welfare expenses, repairs and maintenance and travelling and conveyance expenses, without pointing out any specific defect . The ld. Counsel for the assessee submitted that the assessee is a public limited company and expenses were incurred for business of the assessee which could not be disallowed without pointing specific defects. The ld. Counsel for the assessee relied upon decision of Allahabad-tribunal in the case of DCIT v. A K Construction, in ITA No. 149/Alld/2012 and DCIT v. Chandrawati Construction in ITA No. 140/Alld/2012, vide common order dated 13.12.2012. 6b. The Learned Sr. DR, on the other hand, submitted that this is second round of litigation before tribunal. It was submitted that specific di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Revenue has come in appeal before tribunal agitating relief granted by ld. CIT(A) in the second round of litigation. The first effective issue is concerning disallowance of Material Expenses to the tune of Rs. 2,15,000/-, out of total Material Expenses to the tune of Rs. 7,26,25,516/- claimed by the assessee to have been incurred for business purposes . The AO has observed that the assessee could not produced vouchers/bills to the tune of Rs. 2,15,000/- . The AO accepted Material Expenses to the tune of Rs. 7,24,10,516/- claimed by the assessee. The AO did not specify as to what are the specific expenses aggregating to Rs. 2,15,000/- which could not be satisfactorily explained by the assessee, as no specific details are given by AO pinpointing specific expenses aggregating to the tune of Rs. 2,15,000/- claimed by the assessee as business expenses, but could not be satisfactorily explained by the assessee. The ld. CIT(A) although confirmed additions to the tune of Rs. 2,15,000/- as were made by AO, but ld. CIT(A) did not furnish the details/breakup of the Material expenses aggregating to the tune of Rs. 2,15,000/- which could not be satisfactorily explained by the assesseee. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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