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TMI Blog2023 (10) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... ount. AO has adopted ad-hoc percentage of 20% to make a disallowance towards site expenses without giving any rational basis for the same. AO while making a disallowance has reduced the component of sales tax from the total amount of the site expenses. Assessee has furnished a comparative analysis of the claim of site expenses in the preceding as well as subsequent years as tabulated above. Section 37(1) of the Act provides for allowing expenditure incurred by the assessee for the purpose of its business if they are not in the nature of capital expenditure or personal expenses and not being expenditure of the nature prescribed in section 30 to 36. In the present case before us, none of the authorities below as well as Ld. Sr. DR could br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and were duly complied with. In the course of assessment, Ld. AO noted that assessee has claimed huge expenses in the P L Account amounting to Rs. 13,99,71,432/- which principally resulted in a loss of Rs. 17,25,690/-. Ld. AO called for details and explanations towards major expenses claimed under the head Other Expenses/Miscellaneous expenses . In this respect assessee produced a detailed list of particulars for site expenses claimed in the P L Account for an amount of Rs. 3,67,37,203/-. However, Ld. AO by observing that assessee has not provided any documentary evidence in support of claim of site expenses, adopted an ad-hoc rate of 20% to disallow the site expenses after reducing the component of sales tax from it (20% of Rs. 3,67,37, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that reference to proceeding as well as subsequent years has no bearing on the year under consideration and that the assessee had merely produced a list in respect of site expenses claimed which is not supported by any other documentary evidence. Hence, he urged before the bench to confirm the actions of the authorities below. 6. We have heard the rival contentions and gone through the material placed before us. We note that assessee is a company engaged in the business as railway contractor and supplier. Assessee has furnished the break-up of site expenses which it has claimed in its P L Account. Ld. AO has adopted ad-hoc percentage of 20% to make a disallowance towards site expenses without giving any rational basis for the same. Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X
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