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TMI Blog2024 (11) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... fered explanations regarding each and every expenditure under dispute. Both the lower authorities have not given due weightage to the explanations offered by the assessee and have rather proceeded in a hasty manner to first make the disallowances and then uphold such disallowances. Therefore, in the absence of any specific finding, ad-hoc disallowances in appeal before this Tribunal (that is as sustained by the Ld. First Appellate Authority), cannot be held to be justified. Decided in favour of assesee. - Shri. Sudhanshu Srivastava, Judicial Member For the Appellant : Shri D.D. Chopra, Advocate For the Respondent : Shri Sanjeev Krishna Sharma, D.R. ORDER This appeal has been preferred by the assessee against the order dated 01.05.2024, pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, which came to Rs. 3,83,036/- and added the same to the income of the assessee. 4. The AO, accordingly, completed the assessment under section 143(3) of the Income Tax Act, 1961 (hereinafter called the Act ) at a total income of Rs. 15,42,160/-. 5. Aggrieved, the assessee preferred an appeal before the ld. First Appellate Authority. The case was migrated to NFAC, who partly allowed the appeal of the assessee. 6. Now, the assessee has approached this Tribunal challenging the action of the NFAC by raising the following grounds of appeal: A. Because the learned Commissioner of Income Tax (Appeals) appeals had grossly erred in allowing the appeal in part while completely ignoring that the expenses claimed before the Assessing Officer are al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment proceedings. The above expenses that have been allowed in preceding year, have increased this year because of surge in turnover of the Appellant firm. F. Because the learned CIT(A) has grossly erred in upholding the disallowance of Rs. 8,21,55.00 towards Miscellaneous expenses that have been incurred for the purpose of business only, without appreciating the facts and merely relying on the order passed by the Assessing Officer. G. Because the learned CIT(A) had erred in upholding the disallowance of Rs. 3,31,884.00 under the head Service and Maintenance Expenses as made by the Assessing Officer without considering the explanation as provided by the Appellant. H. Because the learned CIT (A) has erred in upholding the disallowance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular system of accounting, but even then ad-hoc additions/ disallowances had been made to cover up for alleged possible leakage, without giving any specific instance of any discrepancy in the books of account. 7.1 The Ld. A.R. submitted that the AO had made disallowance under the head Salary to the tune of Rs. 1,78,360/- on the allegation that most of the salary was paid in cash and that such expenses were supported by handmade vouchers and also that Muster Rolls and Attendance Register had not been maintained. It was further submitted that the Ld. First Appellate Authority restricted the disallowance to Rs. 32,096/- being payment made in cash. The Ld. A.R. argued that the Ld. First Appellate Authority had erred in not allowing the claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e immediately preceding year, no disallowance had been made by the Department on this account. 7.3 Similarly, with respect to disallowance under the head Commission , it was submitted by the Ld. A.R. that the amount of expenditure claimed was Rs. 1,09,534/- and the said amount was paid to persons who had introduced new clients during the year and which had also resulted in increased sales. It was further submitted that the Ld. First Appellate Authority had grossly erred in upholding the said disallowance on the ground of absence of any details furnished by the assessee. 7.4 Similarly, with respect to disallowance of Rs. 82,155/- on account of Miscellaneous expenses, the Ld. A.R. submitted that these expenses had also been incurred for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred expenditure of Rs. 6,64,165/- on this account. It was submitted that this amount had been incurred towards renovation of the showroom and it was also to be noted that all the five branches of the assessee were located in rented premises and, therefore, showrooms required to be renovated every year and that these were necessary business expenses and, hence, upholding the disallowance was not proper. 7.8 The Ld. A.R. prayed that accordingly, in view of the submissions made and keeping in view the past history of the assessee, the ad-hoc disallowances under challenge need to be completely deleted. 8. The Ld. Sr. D.R. placed reliance on the order of the NFAC and referred to paragraph 5.2.5 of the order of the NFAC and submitted that adequa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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