RAJ QUARRY,VADODARA vs. THE DY. CIT, CIRCLE-1(3), VADODARA

The assessee filed return of income declaring of total income of (-)Rs.1,35,40,922/-. The assessee claimed expenses of Rs.79,28,708/ on account of Mining at Lease site, Site Carting Expenses, Labour & Providing Expenses and Machinery Hire & Expenses. On examination of the vouchers, Assessing Officer disallowed 1/3rd of the expenses for want of proper substantiation of the expenses.

Further, the Assessing Officer disallowed and amount of Rs.11,44,400/- being 1/4th of the expenses on account of diesel and petrol claimed by the assessee of Rs.45,77,900/-.

Aggrieved, the assessee filed appeal before the Ld. CIT(A) who affirmed the order of the Assessing Officer.

On going through the arguments of both the parties, we find that Assessing Officer has not given any justification for disallowance. As per the record, the assessee had a loss of Rs.1.35 crores and brought forwarded loss of Rs.27.29 lakhs. Hence, even after considering a reduction in the ad-hoc disallowances to 10%, the net tax payable would be Nil. Accordingly, in the absence of any details from both the parties to determine disallowance as computed by the Assessing Officer, we affirm the disallowance to 10% of the expenses claimed by the assessee.