KYAL AGENCIES PRIVATE LIMITED,BHUBANESWAR vs. ITO WARD-1(1), BHUBANESWAR

Shri Mohit Sheth, ld AR appeared for the assessee and Shri Shri Mohit Sheth, ld AR appeared for the assessee and Shri Shri Mohit Sheth, ld AR appeared for the assessee and Shri S.C.Mohanty, ld Sr DR appeared for the revenue. S.C.Mohanty, ld Sr DR appeared for the revenue.

It was submitted by ld AR that the first issue in assessee’s case was It was submitted by ld AR that the first issue in assessee’s case was It was submitted by ld AR that the first issue in assessee’s case was against the action of the ld CIT(A) in confirming the addition representing nst the action of the ld CIT(A) in confirming the addition representing nst the action of the ld CIT(A) in confirming the addition representing P a g e 1 | 4 the difference in the sundry creditors to the extent of Rs.11,375/-. Ld AR submitted that he does not wish to press this ground. Ld AR has also endorsed in the appeal memo to this effect. Consequently, the said ground is dismissed as withdrawn.

Ld AR submitted that the second issue was against the action of the ld CIT(A) in confirming 30% adhoc disallowance made by the AO out of sales promotion expenses and general expenses. It was the submission that all the documents in relation to said expenses had been produced before the Assessing Officer. Ld A.R. has placed before us e-Proceedings Response Acknowledgement. It was the submission that the Assessing Officer, on the ground that the assessee could not furnish any bills and vouchers, had made adhoc disallowance of 30% out of sales promotions and general expenses. It was the submission that the ld CIT(A) has confirmed the order of the AO. It was the submission that all the details had been produced before the AO as is evidenced from e-Proceedings Response Acknowledgement. It was the submission that the books of account of the assessee have not been rejected and in view of the decision of the Hon’ble Supreme Court in the case of Principal Commissioner of Income Tad vs R.G. Buildwell Engineers Ltd., (2018) 99 taxmann.com 284 (SC), adhoc disallowance is liable to be deleted.

In reply, ld Sr DR vehemently supported the order of the ld CIT(A). He submitted that the bills and vouchers have not been produced as mentioned by the AO in the assessment order.

We have considered the rival submissions. A perusal of the assessment order shows that the AO mentions that bills and vouchers were not produced. However, a perusal of the e-Proceedings Response Acknowledgement shows otherwise. It shows that the ledger, cash book etc have been produced. It is also noticed that the Assessing Officer has accepted the books of account of the assessee. The Assessing Officer has not been able to specifically point out any specific expense, which is not allowable. When the books of account are available and same are not rejected, adhoc disallowance is not called for. This is as per the principles laid down by the Hon’ble Supreme Court in the case of R.G. Buildwell Engineers Ltd(supra). In these circumstances, the adhoc disallowance made by the AO and confirmed by the ld CIT(A) stands deleted.

In the result, appeal of the assessee stands partly allowed.