9911796707
TMI Blog2025 (2) TMI 1039X X X X Extracts X X X X X X X X Extracts X X X X ..... . Disallowance of expenditure - As assessee has submitted the entire 17 ledger extracts of all the heads like car expenses, auto expenses, security expenses, data entry, repairs, water, newspaper etc. along with the sample vouchers. Books of accounts of the assessee is audited and the same have been submitted to various statutory authorities. AO and that of CIT(A) have disallowed the expenditure on adhoc basis at 5% without any cogent reason or identifying any defects. In the present facts and circumstances of the case we do not agree with the lower authorities in disallowing the expenditure on adhoc basis and hence we set aside the order of Ld. CIT(A) by directing the AO to delete the same by allowing the grounds of appeal filed by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing officer resulting in double addition is required to be deleted. 5.The CIT(A) erred in upholding the disallowing premium in respect of government securities without appreciating that 1/10th of the premium was allowable. The CIT(A) ought to have appreciated that the appellant had already disallowed the entire premium in A Y 2016-17. 6.The Assessing Officer erred by adding a sum of Rs. 1,52,210/- towards 5% on other expenditures that includes various types of expenditure. The details towards the same were furnished and the CIT(A) failed to consider the same and upheld the Assessing Officers order. 7.The CIT(A) ought to have appreciated the fact that the assessing officer without considering the nature and the type of expenditure es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard provision Rs. 1,25,632/- 4. The provision released on NPA provision Rs. 10,603/- 4.1 Firstly, the premium on Government Securities of Rs. 1,950/- and 1,050/- has been claimed as other deductions u/s. 37(1) of the Act as 1/10th of the premium paid, where the entire premium paid have been disallowed in the respective A.Y's from the total income. Further, the assessee has submitted that the standard provision of Rs. 1,25,632/- and NPA provision of Rs. 10,603/- have been creditied to the P&L Account on account of excess provision available in the Balance Sheet which was never claimed as a expenditure under the Act from the total income in the earlier assessment years. Thereby the assessee submitted that the AO has erred in disallowing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 31st March 2016, AY 2016-17 (page no.8 and 9 of paper book) along with the computation of total income (page no.5 to 7 of paper book) wherein the assessee has not claimed the same as deductable expenditure, when the standard provision and NPA provision of Rs. 16,58,753/- was debited to the P&L account. Further, the Ld. AR took us through the financials of AY 2017-18 (page no.4 of paper book) and shown that the provision released credited to P&L account is not an item of income but reduced from the provisions shown under current liabilities in the Balance Sheet carried from the previous year. Therefore, the Ld.AR stated that the AO and that of Ld.CIT(A) have erred in adding the provisions released as income of the assessee and hence pray ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has created a provision in the AY.2016-17 to the tune of Rs. 16,58,753/- and the same has been added back to the total income in the computation of total income without claiming the provision as an expenditure (page no.5 to 9 of paper book). Further, during the AY.2017-18 the assessee has released the provision to the tune of Rs. 1,25,632/- and Rs. 10,603/- by crediting the same to the P&L account by reducing from the provision created in the earlier AY.2016-17 (page no.1 to 4 of paper book). Therefore, we are of the considered view that the AO and that of Ld.CIT(A) have erred in making an addition of Rs. 1,39,235/- and hence we hereby set aside the order of the Ld.CIT(A) and delete the addition. 7.2 In respect of disallowance of expendit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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