The Income Tax Appellate Tribunal (ITAT), Hyderabad Bench deleted the addition on account of miscellaneous expenditure.
The Revenue’s sole substantive ground pleaded in the instant appeal seeks to reverse the CIT (A)’s action deleting disallowance or addition of Rs.1,92,38,312 on account of expenditure incurred.
The department vehemently contended during the course of hearing that the CIT(A) has erred in law and on facts in deleting the impugned miscellaneous expenditure disallowance of Rs.1,92,38,312 despite the fact that the assessee had failed to prove the same by way of filing cogent supportive evidence before the Assessing Officer.
However, the ITAT found no merit in Revenue’s instant grievance.
The coram of Lakshmi Prasad Sahu and S.S.Godara noted that the Assessing Officer had disallowed the assessee’s entire expenses in the drug manufacturing business thereby enhancing its profit to the maximum level. The assessee has already explained the reason for non-production of audited books of account to the fact that there was a tenancy dispute culminating in locked up premises in the corresponding span of time.
“So far as the Revenue’s case that the CIT (A) deleted the impugned disallowance without verification, it has come on record that he had duly sought for a remand report from the Assessing Officer’s side. We therefore find no reason to revive the impugned disallowance going by the Revenue’s pleadings. Its sole grievance failed accordingly,” the ITAT said.
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