M/S. S.R. PROTIENS PVT. LTD,JAIPUR vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-4, JAIPUR

PER BHAGCHAND, AM The assessee has filed an appeal against the order of the ld. CIT(A)-2, Jaipur dated 20-08-2017 for the assessment year 2013-13 raising therein following grounds:- ‘’1. That the impugned assessment order u/s 143(3) dated 31- 12-2015 is bad in law and on facts of the case for want of jurisdiction and for various other reasons and hence the same may kindly be quashed. 2. The ld. CIT(A) has grossly erred in law as well as on the facts of the case in partly sustaining the disallowance of expense of 2,00,000/- out of Rs. 4,00,000/- disallowed by the AO on account of 1

ITA No.761/JP/2017 M/s. S.R. Proteins Pvt. Ltd vs ACIT ,Circle – 4, Jaipur various expenses without invoking the provisions of sec 145(3) which was based merely on assumption, presumption and suspicion. The disallowance so made by the AO and partly confirmed by the ld. CIT(A) is being absolutely, contrary to the provisions of law and facts of the case and not in conformity with the law, hence the same may kindly be deleted in full.

order of the ld. CIT(A) is as under:-

‘’2.3 I have perused the facts of the case, assessment order and the submissions of the appellant. The facts of the case are that the assessee company is engaged in the business of manufacturing of mustard oil and cake. On verification of the books of account the AO noted that the payments against the boiler running expenses, mustard cake expenses, mustard oil expenses and mustard seed crushing expenses were completely made in cash, of amounts less than Rs. 19,000/- in each transaction. They were supported only by self made vouchers and the bills and vouchers for loading and unloading charges were also not produced. The AO made a lump sum disallowance of Rs. 4 lakhs. In the present proceedings, the authorized representative stated that while the sale during the year have increased by almost Rs. 14 lakhs, the expenditure has increased marginally by Rs. 3 lakhs. It was thus submitted that the addition made not justified. It is seen that even during the appeal proceedings the authorized representative has not countered the defects pointed out by the AO in the expenditure made. In view of the same, the disallowance is restricted to Rs. 2 lacs considering that there has been an increase in the turnover. The ground of appeal is partly allowed.

ITA No.761/JP/2017 M/s. S.R. Proteins Pvt. Ltd vs ACIT ,Circle – 4, Jaipur 2.2 During the course of hearing, the ld.AR of the assessee prayed for deletion

of addition confirmed by the ld. CIT(A).

2.3 On the other hand, the ld. DR relied on the order of the ld. CIT(A).

2.4 The Bench has the rival contentions and perused the materials available on

record. It is noted that the AO made the lumpsum disallowance of Rs. 4.00 lacs as

the expenses were not verifiable for want of proper bills and vouchers. In first

appeal , the ld. CIT(A) has reduced the same to the extent of Rs. 2.00 lacs. During

the course of hearing, the ld.AR of the assessee filed the following statement

showing comparative expense.

Nature of expenses A.Y. 2013-14 A.Y. 2012-14 Boiler Running expenses 11,62,680 10,49,497 (excluding Coal & Fuel Expenes) Mustard Cake expenses 11,67,459 10,62,573 Mustard Oil expenses 11,70,530 10,57,045 Mustard Seed expenses 11,62,680 11,75,240 Total 46,63,349 43,44,355 Marginal increase 3,18,994 Amount of total sales 84,97,18,792 70,12,90,610 Thus increase in the 14,84,28,1822 amount of sales by Rs.

Taking into consideration the facts, circumstances of the case and the orders of the

lower authorities, it will be in the interest of equity and justice to sustain the

addition to the extent of Rs. 1.00 lacs as against Rs. 2.00 lacs confirmed by the ld.

CIT(A). Thus Ground No. 1 and 2 of the assessee is partly allowed.

ITA No.761/JP/2017 M/s. S.R. Proteins Pvt. Ltd vs ACIT ,Circle – 4, Jaipur 3.1 The Ground No. 2 of the assessee is regarding charging of interest u/s 234B, 234C and 234D of the Act which are mandatory and consequential in nature. 4.0 In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 13 /11/2017

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