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TMI Blog2024 (3) TMI 1259X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant documents to allow the expenses claimed by the assessee qua freight, transport, coolie and cartage, loading/unloading charges, godown expenses, other expenses, brokerage/commission on purchases etc. No doubt the relevant evidence has not been produced by the assessee before the AO hence he proceeded to make the adhoc disallowance. However now the CIT(A) during the appellate proceedings has duly perused the bills, vouchers, balance sheet, tax audit report, ledger copy and bank statement etc. qua the expenses claimed by the assessee in the light of the fact that the assessee is having turnover of Rs. 600 crores and duly audited books of accounts of the assessee have not been rejected by the AO and proceeded to delete the adhoc d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see s return of income for the year under consideration declaring total income at Rs. 3,22,87,840/- was subjected to scrutiny. Assessing Officer (AO) during the scrutiny proceedings noticed that the assessee has claimed direct expenses to the tune of Rs. 78,55,48,913/-. In reply to the explanation called by the AO assessee stated that it is having turnover of Rs. 600 crores and there are voluminous vouchers for expenses and it is difficult to upload all the vouchers on the Income Tax Business Application (ITBA) portal. AO noticed that the assessee has not furnished even the documentary proof for the major expenses claimed under the heads freight, transport, coolie and cartage, loading/unloading charges, godown expenses, other expenses, brok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n paper book furnished, perused the facts of the case including impugned assessment order and other material brought on record. I found from the submission of the appellant as well as from assessment order that during the assessment proceedings, the appellant, in fact, had submitted prima facie all the requisite documents viz Balance Sheet, Tax Audit report, ledger copy and bank statement etc. Since turnover of the company is Rs. 600 crores, various books and supporting documents like ledger, billst, vouchers were voluminous, and the appellant could not/did not submit each and every sledger and sample bills through the online submission mode. The claim of the appellant that submitting such voluminious M documents/vouchers in an online mode, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , though not a conclusive argument in support of the appellant, further substantiate the claim of the assessee that the ad-hoc disallowance was arbitrary and without any concrete basis and findings. Books of account of the appellant is duly audited u/s. 44AB of the I. T. Act and under companies Act, and no discrepancy has been noticed/pointed out by the auditors. It seems that ledger copies of most of the heads of expenses were produced/filed before the AO online, and also that TDS was also deducted wherever applicable. Further, most of expenses were paid through banking channel and the appellant is having turnover of Rs. 600 crores. 4.5 I have carefully considered the matter, During the appellate proceeding, the appellant has submitted rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt, referred above in para 47, I am of the considered opinion that the ad- hoc disallowance made by the AO is notjustified and needs to be deleted. Thus, the additions of Rs. 7,85,54,891/made by the AO on ad hoc basis is hereby deleted, and thus these grounds of appeal are allowed. 7. We are of the considered view that when books of account maintained by the assessee having been duly audited have not been rejected by the AO the adhoc disallowance made on the basis of surmises is not sustainable in view of the law laid down by the Honourable Supreme Court of India in case of Principal Commissioner of Income Tax vs. R.G. Buildwell Engineers Ltd. (2018) 99 taxmann.com 284 (SC) wherein it is held as under : Where High Court upheld order of Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses claimed by the assessee in the light of the fact that the assessee is having turnover of Rs. 600 crores and duly audited books of accounts of the assessee have not been rejected by the AO and proceeded to delete the adhoc disallowance. 10. Moreover identical disallowances are reported to have been allowed by the revenue in the earlier years. assessee expenses claimed during the year under consideration are commensurate to the expenses claimed by the assessee during the earlier years which is extracted for a ready perusal as under: The ratio of other direct expenses to turnover is also comparable with preceding previous year considering increase in cost of expenses during the year which resulted in marginally increase: Description 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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