9911796707
TMI Blog2024 (10) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... on of branch financials with head office financials, the same gets knocked out. This was duly explained by the assessee before the CIT(A) and also by way of a certificate from Chartered Accountant. The said certificate is enclosed. Hence, the addition made by the ld CIT(A) by way of enhancement is absolutely without any basis and not understanding the basic financials of the assessee company. Ground No. 2 raised by the assessee is hereby allowed. Ad hoc disallowances of expenditure - Admittedly, the ld AO had sought for other details only on 26.12.2017. The assessment finally stood completed on 28.12.2017. It is a fact that the assessee work sites are located at 20 locations and spread over all over the country and also in abroad. It would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OURT] - Decided in favour of assessee. - Shri M. Balaganesh, Accountant Member And Shri Anubhav Sharma, Judicial Member For the Assessee : Shri Amarjeet Singh, CA For the Revenue : Shri Piyush Tripathi, Sr. DR ORDER PER M. BALAGANESH, A. M.: 1. These appeals in ITA Nos. 440/Del/2023 and 255/Del/2019 for AY 2015-16, arise out of the order of the Commissioner of Income Tax (Appeals)-XXVI, New Delhi [hereinafter referred to as ld. CIT(A) , in short] dated 15.01.2019 for AY 271(1)(c) and 15.11.2018 u/s 250(6) against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) dated 28.12.2017 by the Assessing Officer, ACIT, Central Circle-16, New Delhi (hereinafter referred to as ld. AO ). 2. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heet entry dated 26.12.2017, the ld AO asked the assessee to submit bills and vouchers of these expenses. Due to paucity of time, the ld AR of the assessee representing before ld AO submitted that the said bills could not be provided and agreed for 10% of total expenditure to be disallowed. Accordingly, ld AO proceeded to disallow 10% of the aforesaid expenditure in the sum of ₹1,13,03,926/- in the assessment framed on 28.12.2017 u/s 143(3) of the Act. However, the assessee vide letter dated 15.12.2017 had submitted copies of the ledger accounts of major expenses by stating that all the accounts have not been submitted considering the volume involved therein. The assessee before the ld CIT(A) submitted that on security service charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenditure before the ld CIT(A). It was also clarified that around 20 work sites are present and expenses have been merged and given in the aforesaid details of expenditure. The assessee also furnished certificate from the Statutory Auditors stating that a sum of Rs. ₹2,15,47,678/- on account of security services expenses was disallowed u/s 40(a)(ia) of the Act on account of non deposit of TDS before due date of return of income. The said certificate also contain the fact that a sum of ₹4,96,84,717/-, which is included in the travelling and conveyance expenses of Rs. 5.5 crores and that this sum of ₹4.96 crores is head office expenditure debited by Oman Branch of the assessee company and in Head office books, the same had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of branch financials with head office financials, the same gets knocked out. This was duly explained by the assessee before the ld CIT(A) and also by way of a certificate from Chartered Accountant. The said certificate is enclosed at pages 134 to 135 of the paper book. Hence, the addition made by the ld CIT(A) by way of enhancement in the sum of ₹4,96,84,717/- is absolutely without any basis and not understanding the basic financials of the assessee company. Ground No. 2 raised by the assessee is hereby allowed. 8. With regard to ad hoc disallowances of expenditure, it is a fact that assessee had agreed for 10% disallowance of expenses in the assessment proceedings due to paucity of time for furnishing all details before the ld AO. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In view of the decision rendered above on the quantum appeal, the levy of penalty would have no legs to stand. 11. What now remains is only concealment penalty on ad hoc disallowance of expenses. The law is very well settled that there cannot be any levy of penalty on an estimated addition on ad hoc disallowances of expenses. Reliance in this regard is placed on the following decisions:- a. CIT vs. Harprashad Company (Delhi) 328-ITR53 (Del) b. Samunder Bhan Sadh v. CIT [1991] 188 ITR 638 (P H) 12. Accordingly, the grounds raised by the assessee in ITA No. 440/Del/2023 are allowed. 13. In the result, the appeal of the assessee in ITA No. 255/Del/2019 is allowed for statistical purposes and appeal of the assessee in ITA No. 440/Del/2023 is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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