M/s. R.S. Rice Mills (P) Ltd. v. Income-tax Officer, Ward-II, Hardoi - 2016-LL-1019-127

Citation	2016-LL-1019-127
Appellant Name	M/s. R.S. Rice Mills (P) Ltd.
Respondent Name	Income-tax Officer, Ward-II, Hardoi
Court	ITAT-Lucknow
Relevant Act	Income-tax
Date of Order	19/10/2016
Assessment Year	2012-13
Judgment	View Judgment
Keyword Tags	ad hoc disallowance
Bot Summary:	The only issue involved in this appeal relates to the disallowance of a sum of Rs. 97,500/- out of the miscellaneous expenses. The Assessing Officer noted that the assessee has shown expenses at Rs. 20,42,011/- as other expenses, Rs. 10,66,212/- as finance costs and Rs. 6,71,050/- as employees benefit expenses. Merely expenses has been claimed on handmade vouchers in respect of the wages, in my opinion, it cannot be the basis for making the disallowance. It cannot be the basis of disallowing the expenses that the assessee has made the payment of expenses in cash. The revenue has not brought out any violation of the provision of section 40A sub-section on the part of the assessee. The disallowance made by the Assessing Officer is merely ad hoc disallowance. In the result, the appeal filed by the Assessee is allowed.

I.T.A. No. 341/Lkw/2016 1 Assessment Year: 2012-13 IN INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC LUCKNOW BEFORE SHRI P. K. BANSAL, ACCOUNTANT MEMBER ITA No.341/Lkw/2016 Assessment Year :2012-13 M/s. R.S. Rice Mills (P) Ltd. Vs. Income Tax Officer Manglipurva Chauraha, Railway Ward-II, Ganj, Hardoi. Hardoi PAN:-AABCR 1729 D (Appellant) (Respondent) Appellant by Shri Sanjay Saxena, F.C.A. Respondent by Shri Amit Nigam, D.R. Date of hearing 18.10.2016 Date of pronouncement 19.10.2016 ORDER PER P. K. BANSAL, A.M. This appeal has been filed by Assessee against order of CIT(A) Bareilly, dated 16.03.2016 for Assessment Year 2012-13. 2. only issue involved in this appeal relates to disallowance of sum of Rs. 97,500/- out of miscellaneous expenses. 3. I have heard rival submissions and carefully considered same along with orders of tax authorities below. I noted that in this case Assessing Officer noted that assessee has shown net profit at Rs. 1,46,899/- after claiming of depreciation. Assessing Officer noted that assessee has shown expenses at Rs. 20,42,011/- as other expenses, Rs. 10,66,212/- as finance costs and Rs. 6,71,050/- as employees benefit expenses. Assessing Officer on verification found that all vouchers relate to wages were handmade and payments were made in cash. He, therefore, disallowed Rs. 97,500/- on ad hoc basis. When matter went before Ld. CIT(A), Ld. CIT(A) confirmed disallowance. I.T.A. No.341/Lkw/2016 2 Assessment Year: 2012-13 4. I noted that assessee has submitted all details of all expenses and vouchers whatever has been debited by assessee in his Profit & Loss account. Merely expenses has been claimed on handmade vouchers in respect of wages, in my opinion, it cannot be basis for making disallowance. It is not case of revenue that assessee has incurred expenditure in cash in excess of limit prescribed u/s 40A sub-section (3). Therefore, it cannot be basis of disallowing expenses that assessee has made payment of expenses in cash. revenue has not brought out any violation of provision of section 40A sub-section (3) on part of assessee. disallowance made by Assessing Officer is merely ad hoc disallowance. No ad hoc disallowance can be made. I, therefore, delete said disallowance of Rs. 97,500/-. 5. In result, appeal filed by Assessee is allowed. (Order pronounced in open court during course of hearing). Sd/- (P. K. BANSAL) Accountant Member Dated: 19.10.2016 *Sharad Copy of order forwarded to : 1. Appellant 2. Respondent. 3. Concerned CIT 4. CIT(A) 5. D.R., I.T.A.T., Lucknow Asstt. Registrar M/s. R.S. Rice Mills (P) Ltd. v. Income-tax Officer, Ward-II, Hardoi

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