ARUN KUMAR LATH,,BILASPUR(CG) vs. ITO, WARD- 1(1),, BILASPUR(CG)

The grounds of appeal are as under:

The assessee is an individual and derives income from house property, interest income from bank / FDRs, interest and remuneration from partnership firm M/s. Sarwamangala Tyres and M/s. Sarwamangala Lubricants and income from plying passenger busses. Return of income for the A.Y 2009-10 was filed at Rs. 5,31,360/-, besides agricultural income of Rs. 57,020/-. The Assessing Officer assessed the income Rs. 14,26,005/- after making additions on three counts i.e. addition out of disallowance of depreciation of Rs. 30,000/-, disallowance of Rs. 2,00,087/- out of proportionate disallowance of depreciation on the basis of ratio of admissible depreciation on gross receipts and on net receipts Rs. 6,64,558/- out of proportionate disallowance of various expenses relatable to revenue receipts understated in the return.

As regards ground No. 2, the Ld. AR submitted that the addition of Rs. 30,000/- the same is not pressed, hence the ground is dismissed.

As regards ground No. 3, the Ld. AR submitted that the addition made by the Assessing Officer is totally incorrect as the Assessing Officer only presumed that the assessee must have incurred some unrecorded expenses on the differential receipt of Rs. 45,86,996/-. But there was no material on record available to draw this conclusion which is baseless and arbitrary. In fact, no existence of unaccounted expenditure found out by the Assessing Officer. The Ld. AR further submitted that CIT(A) maintained disallowance of Rs. 4,58,700/- out of bus running expenses of Rs. 45,86,996 and Rs. 1,00,000/- out of other expenses like repairs and maintenance, vehicle tax, insurance etc. The Ld. AR further submitted that the assessee submitted the requisite details such as bus account which is at page No. 10 of paper book, profit and loss

As regards ground No. 4, the Ld. AR submitted that the disallowance of Rs. One lakh out of expenses debited to profit and loss account by the CIT(A) amounts to enhancement of assessment order as there was no such disallowance by the A.O in the Assessment Order.

Ld. DR on the other hand relied upon the orders of the lower authorities.

We have heard both the parties and perused all the relevant material available on record. As regards ground No. 3, while making disallowance u/s 37(1) at Rs. 4,58,700/- and Rs. 1,00,000/- out of expenses disallowed by the A.O has not at all considered the evidences produced before the A.O as well as CIT(A). The Ld. AR submitted that all expenses have been incurred for the purpose of business. The addition made by the Assessing Officer is only on presumption that the assessee must have incurred some unrecorded expenses on the differential receipt of Rs. 45,86,996/-. But there was no material on record available to draw this conclusion which is baseless and arbitrary. In fact, no existence of unaccounted expenditure found out by the Assessing Officer. The evidences produced by the assessee during the Assessment proceedings were not properly verified by the Assessing Officer. Therefore, it will be appropriate to remand back this issue to the file of the A.O. and the A.O. to take cognizance of the correct expenses. Thus, Ground No. 3 is partly

In the result the appeal of the assessee is partly allowed for statistical purpose.