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Facts
The Revenue filed appeals against the orders of the CIT(A) deleting disallowances related to depreciation and birth hire income for AY 2010-11 and AY 2013-14. The primary dispute involved the admission of additional evidence under Rule 46A and an ad-hoc disallowance of CSR expenses.
Held
The Tribunal held that the CIT(A) was justified in admitting additional evidence under Rule 46A as the assessee could not produce documents during assessment due to volume and time constraints, and the AO had examined and accepted them. Similarly, the ad-hoc disallowance of CSR expenses was deleted as the AO did not provide specific reasons or evidence of non-genuineness.
Key Issues
Whether the CIT(A) was justified in admitting additional evidence under Rule 46A for depreciation claims and deleting the ad-hoc disallowance of CSR expenses.
Sections Cited
Section 143(3) of the Income-tax Act, 1961, Rule 46A of the Income-tax Rules, 1962
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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY
PER OM PRAKASH KANT, AM
These two appeals filed by the Revenue filed electronically are directed against two separate orders, dated 27.07.2023 and 24.07.2023, passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi for assessment
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years 2010-11 and 2013 11 and 2013-14 respectively. As common issue in 14 respectively. As common issue in dispute is involved in these dispute is involved in these appeals, therefore, same were heard re, same were heard together and disposed of together and disposed off by way of this consolidated order for by way of this consolidated order for convenience and avoid repetition of facts. convenience and avoid repetition of facts.
The grounds of appeal The grounds of appeal raised by the Revenue for assessment Revenue for assessment year 2010-11 in ITA No. 3342/M/2023 are reproduced as under: 11 in ITA No. 3342/M/2023 are reproduced as under: 11 in ITA No. 3342/M/2023 are reproduced as under:
"Whether, on the facts and in the circumstances of the case and in law, "Whether, on the facts and in the circumstances of the case and in law, "Whether, on the facts and in the circumstances of the case and in law, the Ld.CIT (A) was justified in deleting the disallowance made of the Ld.CIT (A) was justified in deleting the disallowance made of the Ld.CIT (A) was justified in deleting the disallowance made of depreciation claim Rs.6,94,43,326/ depreciation claim Rs.6,94,43,326/- admitting the additional evidences admitting the additional evidences under Rule 46A even though the assessee has not under Rule 46A even though the assessee has not fulfilled the following fulfilled the following conditions under Rule 46A: a. Where the [Assessing Officer] has refused conditions under Rule 46A: a. Where the [Assessing Officer] has refused conditions under Rule 46A: a. Where the [Assessing Officer] has refused to admit evidence which ought to have been admitted; or b. Where the to admit evidence which ought to have been admitted; or b. Where the to admit evidence which ought to have been admitted; or b. Where the appellant was prevented by sufficient cause from producing the evidence appellant was prevented by sufficient cause from producing the evidence appellant was prevented by sufficient cause from producing the evidence which he was calle which he was called upon to produce by the [Assessing Officer]; or c. d upon to produce by the [Assessing Officer]; or c. Where the appellant was prevented by sufficient cause from producing Where the appellant was prevented by sufficient cause from producing Where the appellant was prevented by sufficient cause from producing before the [Assessing Officer] any evidence which is relevant to any before the [Assessing Officer] any evidence which is relevant to any before the [Assessing Officer] any evidence which is relevant to any ground of appeal; or d. Where the [Assessing Officer] has made the ground of appeal; or d. Where the [Assessing Officer] has made the ground of appeal; or d. Where the [Assessing Officer] has made the order appealed against without giving sufficient opportunity to the appellant to appealed against without giving sufficient opportunity to the appellant to appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal." adduce evidence relevant to any ground of appeal." 2. "Whether, on the facts and in the circumstances of the case and in law, "Whether, on the facts and in the circumstances of the case and in law, "Whether, on the facts and in the circumstances of the case and in law, the Ld.CIT(A) was justified in deleting the disa the Ld.CIT(A) was justified in deleting the disallowance made without llowance made without appreciating the facts that the depreciation claim on assets for which bills appreciating the facts that the depreciation claim on assets for which bills appreciating the facts that the depreciation claim on assets for which bills were not produced by the assessee for the assessment year 2010 were not produced by the assessee for the assessment year 2010 were not produced by the assessee for the assessment year 2010-11 was Rs.138,88,66,528/ was Rs.138,88,66,528/- of which depreciation claim at the rate of 5% of which depreciation claim at the rate of 5% which was Rs.6,94,43,3 which was Rs.6,94,43,326/- was disallowed." 3. "Whether, on the facts and in the circumstances of "Whether, on the facts and in the circumstances of the case and in law, the case and in law, the Ld.CIT (A) was justified in deleting addition on account of the Berth the Ld.CIT (A) was justified in deleting addition on account of the Berth the Ld.CIT (A) was justified in deleting addition on account of the Berth Hire Income of Rs. 63,16,668/ Hire Income of Rs. 63,16,668/- holding that birth hire income earned income earned during the trial during the trial run operation are allocated to the fixed assets and has run operation are allocated to the fixed assets and has been already offered by the assessee as pre been already offered by the assessee as pre-commencement income." commencement income." 4. The appellant prays that the order of the CIT(A) on the grounds be set The appellant prays that the order of the CIT(A) on the grounds be set The appellant prays that the order of the CIT(A) on the grounds be set aside and confirm the order of the AO. aside and confirm the order of the AO. 3. Briefly stated fa facts of the case are that the assessee company cts of the case are that the assessee company is engaged in the business of development and operation of ports is engaged in the business of development and operation of ports is engaged in the business of development and operation of ports and providing port services. In the assessment completed u/s and providing port services. In the assessment completed u/s and providing port services. In the assessment completed u/s 143(3) of the Income 143(3) of the Income-tax Act, 1961 (in short ‘the Act’) dated tax Act, 1961 (in short ‘the Act’) dated
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28.03.2013 , total los total loss was determined at Rs.2,67,37,780/ 37,780/-. In the assessment, the Assessing Officer made disallowance firstly, of assessment, the Assessing Officer made disallowance assessment, the Assessing Officer made disallowance Rs.6,94,43,326/- for depreciation @ 5% on the bills which were not for depreciation @ 5% on the bills which were not for depreciation @ 5% on the bills which were not produced during the assessment proceedings amounting to Rs. produced during the assessment proceedings amounting to produced during the assessment proceedings amounting to and secondly , disallowance of Rs.63,16,668/ 138,88,66,528/- and disallowance of Rs.63,16,668/- for the income out of trial run not shown in the profit and loss account. the income out of trial run not shown in the profit and loss account. the income out of trial run not shown in the profit and loss account. 4. On further appeal, the Ld. CIT(A) deleted both the additions. On further appeal, the Ld. CIT(A) deleted both the additions. On further appeal, the Ld. CIT(A) deleted both the additions. Aggrieved, the Revenue is in appeal before the Tribunal raising the Aggrieved, the Revenue is in appeal before the Tribunal raising the Aggrieved, the Revenue is in appeal before the Tribunal raising the grounds as reproduced above. s as reproduced above. 5. As far as ground No As far as ground Nos. 1 & 2 of the appeal of the Revenue of the appeal of the Revenue are concerned, the Revenue is mainly aggrieved with the Revenue is mainly aggrieved with the Revenue is mainly aggrieved with admission of additional evidence additional evidence by the ld CIT(A) invoking Rule 46A of the invoking Rule 46A of the Income-tax Rules, 1962 (in short ‘the Rules’) tax Rules, 1962 (in short ‘the Rules’). The facts in brief qua . The facts in brief qua the issue in dispute are that during the assessment proceedings, the issue in dispute are that during the assessment proceedings, the issue in dispute are that during the assessment proceedings, the assessee could not produce the assessee could not produce bills of Rs. 138,88,66,528/ 138,88,66,528/- in respect of fixed assets and therefore, the Assessing Officer assets and therefore, the Assessing Officer assets and therefore, the Assessing Officer disallowed deprecation @ 5% on those bills allowed deprecation @ 5% on those bills , which was worked out which was worked out to Rs.6,94,43,326/-. During the appellate proceedings before the . During the appellate proceedings before the . During the appellate proceedings before the Ld. CIT(A), the assessee Ld. CIT(A), the assessee filed those bills and vouchers in the form of filed those bills and vouchers in the form of additional evidence along with application under Rule 46A of the additional evidence along with application under Rule 46A additional evidence along with application under Rule 46A Rules for admitting Rules for admitting those additional evidence. The Ld. CIT(A) additional evidence. The Ld. CIT(A) forwarded those additional evidence to the file of the Assessing forwarded those additional evidence to the file of the Assessing forwarded those additional evidence to the file of the Assessing Officer under the procedure laid down under Rule 46A of the Rules. Officer under the procedure laid down under Rule 46A of the Rules. Officer under the procedure laid down under Rule 46A of the Rules. The Ld. Assessing Officer in his remand report though examined The Ld. Assessing Officer in his remand report though The Ld. Assessing Officer in his remand report though
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and verified the bills and verified the bills, however submitted that those additional however submitted that those additional evidence should not be admitted for the reason that the assessee evidence should not be admitted for the reason that the assessee evidence should not be admitted for the reason that the assessee failed to produce those bills and vouchers during the course of the failed to produce those bills and vouchers during the course of the failed to produce those bills and vouchers during the course of the assessment proceedings. The Ld. CIT(A) however, admitted the assessment proceedings. The Ld. CIT(A) however, ad assessment proceedings. The Ld. CIT(A) however, ad additional evidence submitted by the assessee and deleted the additional evidence submitted by the assessee and deleted the additional evidence submitted by the assessee and deleted the additional observing as under: additional observing as under:
“The Assessing Officer has examined additional evidences submitted in The Assessing Officer has examined additional evidences submitted in The Assessing Officer has examined additional evidences submitted in the form of 13 box files that were not submitted at the time of assessment the form of 13 box files that were not submitted at the time of assessment the form of 13 box files that were not submitted at the time of assessment proceedings and after detailed verification of such invoices the A.O stated ings and after detailed verification of such invoices the A.O stated ings and after detailed verification of such invoices the A.O stated that the same is found correct and acceptable. But without specifying any that the same is found correct and acceptable. But without specifying any that the same is found correct and acceptable. But without specifying any reasons the AO has requested the CIT( appeals) not to give relief to the reasons the AO has requested the CIT( appeals) not to give relief to the reasons the AO has requested the CIT( appeals) not to give relief to the assessee based on the additional evidenc assessee based on the additional evidences submitted. This sounds es submitted. This sounds illogical where as one side is accepting the correctness of the evidences illogical where as one side is accepting the correctness of the evidences illogical where as one side is accepting the correctness of the evidences and at the same time requesting not to give relief. and at the same time requesting not to give relief. From the remand report submitted by the AO it can be clearly understood From the remand report submitted by the AO it can be clearly understood From the remand report submitted by the AO it can be clearly understood that the AO has accepted the cor that the AO has accepted the correctness of the claim and no negative rectness of the claim and no negative inference was drawn and hence disallowance of Rs.6,94,43,326/ inference was drawn and hence disallowance of Rs.6,94,43,326/ inference was drawn and hence disallowance of Rs.6,94,43,326/- being 5% of the capitalisation amount is not in accordance with the provisions 5% of the capitalisation amount is not in accordance with the provisions 5% of the capitalisation amount is not in accordance with the provisions of the Act and hence the, same is deleted. Ground of appeal filed by the of the Act and hence the, same is deleted. Ground of appeal filed by the of the Act and hence the, same is deleted. Ground of appeal filed by the assessee is allowed. essee is allowed.” 6. We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. The only objection of the Revenue is relevant material on record. The only objection of the Revenue is relevant material on record. The only objection of the Revenue is that those additional evidence that those additional evidences should not have been admitted by should not have been admitted by the Ld. CIT(A), being admitted in contrav , being admitted in contravention of provisions of Rule ention of provisions of Rule 46A of the Rules. For ready ref 46A of the Rules. For ready reference, the Rule 46A of the Ru erence, the Rule 46A of the Rules is reproduced as under: reproduced as under:
“46A. Production of additional evidence before the Deputy “46A. Production of additional evidence before the Deputy “46A. Production of additional evidence before the Deputy Commissioner (Appeals) and Commissioner (Appeals). Commissioner (Appeals) and Commissioner (Appeals). (1)The appellant shall not be entitled to produce before the Deputy The appellant shall not be entitled to produce before the Deputy The appellant shall not be entitled to produce before the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner Commissioner (Appeals) or, as the case may be, the Commissioner Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals), any evidence, whether oral or documentary, other than the (Appeals), any evidence, whether oral or documentary, other than the (Appeals), any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the dence produced by him during the course of proceedings before the dence produced by him during the course of proceedings before the Assessing Officer, except in the following circumstances, namely : Assessing Officer, except in the following circumstances, namely : Assessing Officer, except in the following circumstances, namely :-
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(a)where the Assessing Officer has refused to admit evidence where the Assessing Officer has refused to admit evidence where the Assessing Officer has refused to admit evidence which o which ought to have been admitted ; or (b)where the appellant was prevented by sufficient cause from where the appellant was prevented by sufficient cause from where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by producing the evidence which he was called upon to produce by producing the evidence which he was called upon to produce by the Assessing Officer ; or the Assessing Officer ; or (c)where the appellant was prevented by sufficient cause from where the appellant was prevented by sufficient cause from where the appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is producing before the Assessing Officer any evidence which is producing before the Assessing Officer any evidence which is relevant to any ground of appeal ; or relevant to any ground of appeal ; or (d)wher where the Assessing Officer has made the order appealed e the Assessing Officer has made the order appealed against without giving sufficient opportunity to the against without giving sufficient opportunity to the against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appellant to adduce evidence relevant to any ground of appellant to adduce evidence relevant to any ground of appeal appeal. (2)No evidence shall be admitted un No evidence shall be admitted under sub-rule (1) unless the Deputy rule (1) unless the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner Commissioner (Appeals) or, as the case may be, the Commissioner Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) records in writing the reasons for its admission. (Appeals) records in writing the reasons for its admission. (3)The Deputy Commissioner (Appeals) or, as The Deputy Commissioner (Appeals) or, as the case may be, the the case may be, the Commissioner (Appeals) shall not take into account any evidence Commissioner (Appeals) shall not take into account any evidence Commissioner (Appeals) shall not take into account any evidence produced under sub produced under sub-rule (1) unless the Assessing Officer has been rule (1) unless the Assessing Officer has been allowed a reasonable opportunity allowed a reasonable opportunity- (a)to examine the to examine the evidence or document or to cross evidence or document or to cross-examine the witness produced by the appellant, or witness produced by the appellant, or (b)to produce any evidence or document or any witness in rebuttal to produce any evidence or document or any witness in rebuttal to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the of the additional evidence produced by the appellant. appellant. (4)Nothing contained in this rule shall affect the power of the Deputy Nothing contained in this rule shall affect the power of the Deputy Nothing contained in this rule shall affect the power of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner Commissioner (Appeals) or, as the case may be, the Commissioner Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) to direct the production of any document, or th (Appeals) to direct the production of any document, or the examination of e examination of any witness, to enable him to dispose of the appeal, or for any other any witness, to enable him to dispose of the appeal, or for any other any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or substantial cause including the enhancement of the assessment or substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the Assessing penalty (whether on his own motion or on the request of the Assessing penalty (whether on his own motion or on the request of the Assessing Officer) under clause (a) of sub Officer) under clause (a) of sub-section (1) of section 251 or the imposition ection (1) of section 251 or the imposition of penalty under section 271. of penalty under section 271.” 6.1 Before us the Ld. counsel for the assessee the Ld. counsel for the assessee submitted that due to submitted that due to time taken for photocopying of time taken for photocopying of voluminous records of voluminous records of bills and vouchers containing containing 13 box files, same could not be produced , same could not be produced during the course of the assessment proceedings during the course of the assessment proceedings, h , however, same were produced before the Ld. CIT(A) were produced before the Ld. CIT(A). In our opinion the rule . In our opinion the rule 46A(1)(d) of the Rules take care of such a situation and therefore, 46A(1)(d) of the Rules take care of such a situation and therefore, 46A(1)(d) of the Rules take care of such a situation and therefore,
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the ld CIT(A) is justified in admit the ld CIT(A) is justified in admitting the evidences. Further, we are of the opinion that when the Assessing Officer himself as verified when the Assessing Officer himself as verified when the Assessing Officer himself as verified those bills and vouchers and found to be correct those bills and vouchers and found to be correct, in the interest of in the interest of substantial justice objection to additional evidence is not as per substantial justice objection to additional evidence is not substantial justice objection to additional evidence is not terms of Rule 46A. Therefore, we do not find any infirmity in the A. Therefore, we do not find any infirmity in the A. Therefore, we do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and accordingly, we order of the Ld. CIT(A) on the issue in dispute and accordingly order of the Ld. CIT(A) on the issue in dispute and accordingly uphold the same. The ground No uphold the same. The ground Nos. 1 and 2 of the appeal of the . 1 and 2 of the appeal of the Revenue are accordingly dismissed. accordingly dismissed. 7. The ground No. 3 of the appeal of th The ground No. 3 of the appeal of the assessee relate to e assessee relate to addition of Rs.63,16,688/ addition of Rs.63,16,688/- in respect of birth hire income which in respect of birth hire income which have been deleted by the Ld. CIT(A). have been deleted by the Ld. CIT(A). 7.1 We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. relevant material on record. We find that assessee has earned tota We find that assessee has earned total birth birth hire hire income income of of Rs.1,28,57,298/ Rs.1,28,57,298/-, out out of of income income of of Rs.63,16,688/- was earned during the course of the trial run and earned during the course of the trial run and which was adjusted against trial adjusted against trial run expenditure or or netted against entire cost of fixed assets/capital work in progress. But according entire cost of fixed assets/capital work in progress. But accordin entire cost of fixed assets/capital work in progress. But accordin to the Assessing Officer this income of Rs.63,16,688/- was not to the Assessing Officer this income of Rs.63,16,688/ to the Assessing Officer this income of Rs.63,16,688/ reflected in the profit and loss account and therefore, he added to reflected in the profit and loss account and therefore, he added to reflected in the profit and loss account and therefore, he added to the returned income of the assessee. The Ld. CIT(A) has deleted the the returned income of the assessee. The Ld. CIT(A) has deleted the the returned income of the assessee. The Ld. CIT(A) has deleted the addition holding that the birth hire charges during the trial run addition holding that the birth hire charges during the addition holding that the birth hire charges during the operation to the tune of Rs.63,16,688/ operation to the tune of Rs.63,16,688/- has already been offered by has already been offered by the assessee. We agree with the finding of the Ld. CIT(A) and do not the assessee. We agree with the finding of the Ld. CIT(A) and do not the assessee. We agree with the finding of the Ld. CIT(A) and do not find any infirmity in the same as the income during the trial run find any infirmity in the same as the income during the trial run find any infirmity in the same as the income during the trial run
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has gone to reduce the cost of the assets to reduce the cost of the assets and thus directly income and thus directly income stand offered to tax. The ground No. 3 of the appeal of the Revenue stand offered to tax. The ground No. 3 of the appeal of the Revenue stand offered to tax. The ground No. 3 of the appeal of the Revenue is accordingly dismissed. is accordingly dismissed.
Now we take up the appeal of the Revenue for assessment year Now we take up the appeal of the Revenue for assessment year Now we take up the appeal of the Revenue for assessment year 2013-14. The grounds raised by the Revenue are reproduced as 14. The grounds raised by the Revenue are reproduced as 14. The grounds raised by the Revenue are reproduced as under:
"Whether, on the facts and in the circumstances of the case and in law, Whether, on the facts and in the circumstances of the case and in law, Whether, on the facts and in the circumstances of the case and in law, the Ld.CIT (A) was justified in deleting the disallowance made of the Ld.CIT (A) was justified in deleting the disallowance made of the Ld.CIT (A) was justified in deleting the disallowance made of depreciation claim Rs.6,94,43,326/ depreciation claim Rs.6,94,43,326/- relying on the decision of the relying on the decision of the Ld.CIT(A) for A. Y.2010 Ld.CIT(A) for A. Y.2010-11 wherein the Ld. CIT(A) deleted the similar leted the similar disallowance admitting the additional evidences under Rule 46A even disallowance admitting the additional evidences under Rule 46A even disallowance admitting the additional evidences under Rule 46A even though the assessee has not fulfilled the following conditions under Rule though the assessee has not fulfilled the following conditions under Rule though the assessee has not fulfilled the following conditions under Rule 46A in the said 46A in the said A.Y. 2 "Whether, on the facts and in the circumstances of the case and in law, "Whether, on the facts and in the circumstances of the case and in law, "Whether, on the facts and in the circumstances of the case and in law, the Ld.CIT(A) was justified in deleting the 10% of the disallowance made he Ld.CIT(A) was justified in deleting the 10% of the disallowance made he Ld.CIT(A) was justified in deleting the 10% of the disallowance made out of total CSR expenses without appreciating the facts that the out of total CSR expenses without appreciating the facts that the out of total CSR expenses without appreciating the facts that the assessee had not produced any documentary evidences in respect of the assessee had not produced any documentary evidences in respect of the assessee had not produced any documentary evidences in respect of the above expenses. above expenses. 3 The appellant prays that the 3 The appellant prays that the order of the CIT(A) on the grounds be set order of the CIT(A) on the grounds be set aside and confirm the order of the AO. aside and confirm the order of the AO. 9. The ground No. 1 of the appeal of the Revenue is identical to The ground No. 1 of the appeal of the Revenue is identical to The ground No. 1 of the appeal of the Revenue is identical to the ground No. 1 raised in assessment year 2010 the ground No. 1 raised in assessment year 2010-11 and therefore, 11 and therefore, following our finding following our finding in assessment year 2010-11, t 11, this ground of appeal of the Revenue is dismissed. appeal of the Revenue is dismissed.
The ground No. 2 of the appeal of the Revenue relates to The ground No. 2 of the appeal of the Revenue relates to The ground No. 2 of the appeal of the Revenue relates to deleting the 10% of the disallowance made out of total CSR deleting the 10% of the disallowance made out of total CSR deleting the 10% of the disallowance made out of total CSR expenses. The relevant finding of the Ld. CIT(A) on the issue in expenses. The relevant finding of the Ld. CIT(A) on the issue in expenses. The relevant finding of the Ld. CIT(A) on the issue in dispute is reproduced as under: produced as under:
“Ground No. 2:
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This ground pertain to adhoc disallowance of Rs.4,57,884/ This ground pertain to adhoc disallowance of Rs.4,57,884/ This ground pertain to adhoc disallowance of Rs.4,57,884/- which is 10% of the CSR expenses claimed by the assessee during the year under of the CSR expenses claimed by the assessee during the year under of the CSR expenses claimed by the assessee during the year under consideration. The Assessing Officer in his order while making consideration. The Assessing Officer in his order consideration. The Assessing Officer in his order while making while making disallowance at the r disallowance at the rate of 10% has stated that it is not possible to ate of 10% has stated that it is not possible to ascertain whether entire amount of Rs.45,78,842/ ascertain whether entire amount of Rs.45,78,842/- has been expanded has been expanded towards Corporate Social Responsibility expenses, of the assessee towards Corporate Social Responsibility expenses, of the assessee towards Corporate Social Responsibility expenses, of the assessee company and further has stated that this disallowance is being made company and further has stated that this disallowance is being made company and further has stated that this disallowance is being made following the stand taken for AY 2011 wing the stand taken for AY 2011-12. The Assessing Officer has not 12. The Assessing Officer has not drawn the basis to arrive at such conclusion and has not found any drawn the basis to arrive at such conclusion and has not found any drawn the basis to arrive at such conclusion and has not found any invalid/inadmissible documentary evidences. The Assessing Officer is invalid/inadmissible documentary evidences. The Assessing Officer is invalid/inadmissible documentary evidences. The Assessing Officer is duty bound to bring out detailed facts on record befo duty bound to bring out detailed facts on record before modifying the re modifying the taxable income. Adequate materials should have been gathered and taxable income. Adequate materials should have been gathered and taxable income. Adequate materials should have been gathered and placed on record on to established that it warrants upwards modification placed on record on to established that it warrants upwards modification placed on record on to established that it warrants upwards modification of the taxable profit. Based on the facts available on record, it is observed of the taxable profit. Based on the facts available on record, it is observed of the taxable profit. Based on the facts available on record, it is observed that the Assessing Offi that the Assessing Officer had not pointed out any non-genuine entries in genuine entries in the books of accounts of the assessee and has not established that any the books of accounts of the assessee and has not established that any the books of accounts of the assessee and has not established that any particular expenditure has not been wholly and exclusively incurred for the particular expenditure has not been wholly and exclusively incurred for the particular expenditure has not been wholly and exclusively incurred for the purpose of business. Further, the AO has not found any exp purpose of business. Further, the AO has not found any exp purpose of business. Further, the AO has not found any expenditure to be bogus or fictitious. Hence, the addition made by the Assessing Officer is bogus or fictitious. Hence, the addition made by the Assessing Officer is bogus or fictitious. Hence, the addition made by the Assessing Officer is considered unwarranted and the same is deleted. Grounds of appe considered unwarranted and the same is deleted. Grounds of appe considered unwarranted and the same is deleted. Grounds of appeal of this issue stand allowed”. this issue stand allowed”. 11.1 We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that ute and perused the relevant material on record. We find that ute and perused the relevant material on record. We find that that the Assessing Officer has made ad that the Assessing Officer has made ad-hoc disallowance @ 10% hoc disallowance @ 10% Corporate Social Responsibility (C orporate Social Responsibility (CSR) expenses on the ground that expenses on the ground that it was not possible it was not possible to ascertain whether the entire amount of to ascertain whether the entire amount of Rs.45,78,842/- had been expanded towards Corporate Social had been expanded towards Corporate Social had been expanded towards Corporate Social Responsibility expenses. Under the scrutiny process, it is the Responsibility expenses. Under the scrutiny process, it is the Responsibility expenses. Under the scrutiny process, it is the responsibility of the Assessing Officer to verify the bills and responsibility of the Assessing Officer to verify the bills and responsibility of the Assessing Officer to verify the bills and vouchers of the expenses if he was having any doubt, but he cannot vouchers of the expenses if he was having any doubt vouchers of the expenses if he was having any doubt be permitted to make ad tted to make ad-hoc disallowance without verifying the hoc disallowance without verifying the genuineness of the expenses. In our opinion, the Ld. CIT(A) is genuineness of the expenses. In our opinion, the Ld. CIT(A) is genuineness of the expenses. In our opinion, the Ld. CIT(A) is justified in deleting the said ad justified in deleting the said ad-hoc disallowance. We do not find hoc disallowance. We do not find any infirmity in the order of the Ld. CIT(A) in deleting the any infirmity in the order of the Ld. CIT(A) in deleting the any infirmity in the order of the Ld. CIT(A) in deleting the disallowance following the binding precedent on the issue in ce following the binding precedent on the issue in ce following the binding precedent on the issue in
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dispute. The ground No. 2 of the appeal of the Revenue is dispute. The ground No. 2 of the appeal of the Revenue is dispute. The ground No. 2 of the appeal of the Revenue is accordingly dismissed. accordingly dismissed.
In the result, both the appeals of the Revenue are dismissed. In the result, both the appeals of the Revenue are dismissed. In the result, both the appeals of the Revenue are dismissed.
Order pronounced in the open Court on nounced in the open Court on 30/04/2024. /04/2024. Sd/ Sd/- Sd/- (RAHUL CHAUDHARY RAHUL CHAUDHARY) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 30/04/2024 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai