Abir Buildcom Pvt. Ltd., Raipur V. Assistant Commissioner Of Income Tax(4)1, Raipur

ITA 75/RPR/2018

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5796 (ITAT-RAIPUR)
• Duration Of Justice: 4 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 21-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 143(3); 142(1); 133(6); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER ं. / ITA No. 75/RPR/2018 / Assessment Year : 2013-14 M/s Abir Buildcon Private Limited, 346, c/o Abdul Matin Std, Near Suni Masjid Nayapara, Raipur (C.G) PAN : AAHCA 3054 A ....... Appellant / V/s. ACIT (4)1, Raipur (C.G) ...... ! / Respondent Assessee by : Sh. Praveen Jain, CA Revenue by : Shri G. N. Singh, Sr. DR " # $ % / Date of Hearing : 10.06.2022 &' # $ % / Date of Pronouncement : 19.07.2022 (े* / ORDER PER RATHOD KAMLESH JAYANTBHAI, AM: This appeal filed by the assessee aggrieved the order of the Commissioner of Income Tax, (Appeals)-II, Raipur [ C. G.] [ Here in 2 ITA No. 75/RPR/2018 A.Y.2013-14 after referred as Ld. CIT(A) ] dated 28.03.2018 for the assessment year 2013-14 which in turn arise from the assessment orders passed by the ACIT-4(1), Raipur under section 143(3) of the Act dated 28.03.2016. 2. Before us the assessee has assailed the impugned order on the following grounds of appeal: Ground 1: That on the facts and on the circumstances of the case Ld. CIT(A) erred in sustaining disallowance of Rs. 12,42,677/- towards site plantation expenses made by Ld AO. Disallowance is unjustified and uncalled for and may kindly be deleted. Ground 2: That on the facts and on the circumstances of the case Ld. CIT(A) erred in sustaining addition of Rs. 27,00,000/- towards unsecured loans. Addition is unjustified and uncalled for and may kindly be deleted. Ground 3: That on the facts and on the circumstances of the case Ld. CIT(A) erred in sustaining addition of Rs. 76,20,000/- towards share application money raised. Addition is unjustified and uncalled for, and may kindly be deleted. Ground 4: That on the facts and on the circumstances of the case Ld. CIT(A) erred in sustaining disallowance of Rs. 7,45,825/- towards staff and labour expenses made by Ld AO. Disallowance is unjustified and uncalled for and may kindly be deleted. Ground 5: That on the facts and on the circumstances of the case the order passed by Ld. ACIT-4(1) Raipur, and sustained by CIT(A)-II is erroneous in law and is against the facts and circumstances of the case. Ground 6: The assessee craves leave to add, urge, alter or withdraw any ground/s before or at the time of hearing of this appeal. 3. The case was fixed for hearing after issuing notices to both the parties. 3 ITA No. 75/RPR/2018 A.Y.2013-14 4. The fact as culled out from the records is that the assessee filed return of income on 30.09.2013 declaring income of Rs. 52,23,430/- through E-filing vide acknowledgement no. 804543581300913. The case was selected for scrutiny through CASS. It falls under the norms for compulsory scrutiny as provided in CBDT guideline. Accordingly, a notice u/s 143(2) was issued from time to time. Due to reallocation of jurisdiction vide order dated 15.11.2014 the case was received on transfer from DCIT-2(1),Raipur to Circle 4(1). A fresh notice u/s 142(1) calling information was issued to the assessee. The counsel of the assessee appeared on different dates and submitted various details. Books of accounts, bills and vouchers produced are examined by way of test check. The submissions have been duly considered and are placed on record. 5. During the course of assessment proceeding the ld. AO has after going through the records and submissions of the assessee made the additions/disallowance and the relevant extract from the assessment order is reproduced for the sake of brevity of the facts: “Disallowance of the site plantation expenses During the course of assessment proceedings, it was found that huge expenses to the tune of Rs. 49,70,710/- was claimed as plantation expenses. When the bills of these plantations were produced, they appeared to be exaggerated. The rates of these plants used for plantations were thus ascertained 4 ITA No. 75/RPR/2018 A.Y.2013-14 by calling of information u/s 133(6) of the Income Tax Act from the government forest department through the DFO/(Divisional Forest Officer), Raipur and also from the different private nurseries in Raipur. Thus, a detailed comparative analysis was done of the prices of plants. Thus, the prices of the plants were proved to be exaggerated to inflate the expenses. Hence, a part equivalent to ¼ th of these expenses is disallowed and added back to the returned income. Disallowance: Rs. 12, 42, 677/- Disallowance of an unsecured loan During the year under consideration the assessee has taken an unsecured loan of Rs.27,00,000 from one Mr. Rajendra Prasad Agarwal. To ascertain the identity, genuineness and creditworthiness of this person, his Income tax return, computation, confirmation, personal balance sheet were called for. The creditworthiness couldn’t be proved as this lender files an annual income tax-return of Rs. 4,46,321/-. Also, his balance sheet couldn’t substantiate his credit- worthiness. Hence, an amount of Rs. 27,00,000/- is being added to the total income of the assessee as unexplained money in the hands of the assessee. Disallowance : Rs. 27,00,000/- Disallowance of the share application money received During the course of proceedings, it was submitted by the assessee that share application money was raised by the assessee to the tune of Rs. 76,20,000/- as below: That details of share application money raised/refunded during the year under consideration is as under:- S. No. Particulars PAN Raised (Rs.) 1. Bina Tanna ADIPT4918P 11,30,000.00 2 Varsha Tanna ADIPT4919N 7,50,000.00 3 Vipin Chandra Tanna ABOPT8036A 15,40,000.00 4 Vipin Tanna (HUF) AADHV7582H 14,00,000.00 5 Mohd. Akram Khan AUDPK9500A 15,00,000.00 6 Poonam Ubodweja AAHPU4290P 13,00,000.00 7 Total 76,20,000.00 The particulars of the above persons were verified as regards to their identity, genuineness and credit-worthiness to raise such huge amounts. Their ITRs for 3 years were verified and analysed. Out of them, the PAN of Vipin Tanna (HUF) appeared INVALID. In the course of verification it was found that, some of them (for eg: Varsha Tanna) are salaried employees of the company who are getting a mere salary of around Rs. 12,000 – 20,000/- per month. Their returns of 3 years were also verified 5 ITA No. 75/RPR/2018 A.Y.2013-14 and hence, their creditworthiness couldn’t be proved. Hence, all this money added back as unexplained money in the hands of the assessee which has been given the colour of “share application money” to evade taxes. Disallowance : Rs. 76,20,000/- Disallowance of expenses related to staff and labour The assessee has been claiming huge expenses related to its employees and labour under many different heads as follows: • Salary and allowance expenditure • Staff and labour welfare a/c • Commission exp. • Incentive to employees • Salaries expenditure to Mkt. staff • Labour and wages When verified from the books following observations were made. • The same set of employees were getting salary, salary to marketing staff, incentive, commission. For eg: one Mr. Fida Hussain was receiving salary, commission, incentive. • Cash payments were made to labours, but couldn’t be verified due to non- availability of proper records like register, rolls, vouchers etc. Therefore, there a disallowance of 1/10 th of the expenses is being made: (a) Salary and allowance expenditure – Rs. 18,10,795/- (b) Staff and labour welfare A/c Rs. 43,595/- (c) Incentive to employees – Rs. 4,48,588/- (d) Salaries expenditure to Mkt. staff – Rs. 12,68,466/- (e) Labour and wages – Rs. 38,86,813/- Total : Rs. 74,58,257 Thus, disallowance of 1/10 th i.e. Rs. 7,45,825/- is being disallowed and added back to the total income of the assessee. Disallowance – Rs. 7,45,825/-“ 6. Aggrieved from the order of the assessing officer the appeal was preferred before the Commissioner of Income Tax, Appeals – II, Raipur but without any success. 6 ITA No. 75/RPR/2018 A.Y.2013-14 7. The assessee being aggrieved with the order of the CIT(A) carried the matter in appeal before us. 8. We have heard the representatives of both the parties, persuaded the orders of the lower authorities and the material available on record, and also persuaded the judicial precedent placed before us for service. 9. In so far as the nonappearance before the ld. CIT(A) the ld. AR appearing on behalf of the assessee submitted that since, one of the managing Director of the company was in prison, the notices issued by the ld. CIT(A) became non complied with for this reason and the ld. CIT(A) has merely discussed the findings of the assessing officer and has not considered the various grounds raised before him on merits. 10. Before us ld. AR appearing on behalf of the assessee based on the submission made before the assessing officer and ld. CIT(A) argued that in respect of the each of the addition detailed submissions were made even though the ld. CIT(A) confirmed all the additions. The gist of the submission made before the ld. CIT(A) is extracted here in below 7 ITA No. 75/RPR/2018 A.Y.2013-14 1. The Learned Assessing Officer has made adhoc disallowance of Rs. 12,42,677/- towards site plantation expenses on the premise that the plantation expenses appeared to be exaggerated to inflate the expenses. However it is worthwhile to note that the rates of the plants are based on the quality and age of the plant and many other factors. Assessee affirms the genuiness of the expenses claimed. Considering the good quality and longer life of the plants purchased, the amount claimed by the appellant is on the basis of arms length transaction. Thus disallowances made are uncalled for and may kindly be deleted. Thus, making adhoc disallowance to prevent the probable inflation of expenses is not justified, against the law of natural justice and expenses as claimed may kindly be allowed. 2. That on the fact and on the circumstances of the case, Ld. AO erred in making addition of Rs. 27,00,000/- towards unsecured loans which is bad in law, against law of natural justice and uncalled for and may kindly be deleted. The Learned Assessing Officer has made addition of Rs. 27,00,000/ towards an Unsecured Loan taken by the assessee from Mr. Rajendra Prasad Agrawal on the premise that the credit worthiness of the lender couldn't be proved from his Income Tax Return and his Balance Sheet. The lender is regularly submitting the Income Tax Returns from past many years. Also the Financial Statements of the lender have been provided by the assessee in which the Loan imparted to the assessee is separately reflected. Loan has been imparted through account payee Cheque. There is no cash deposit in the bank of the Lender prior to imparting of Loan. Assessee has already submitted Copy of PAN, Confirmation of Account, Extract of Bank Statement, IT Acknowledgement, Computation of Income & Financial Statement in support of Identity, creditworthiness and genuineness of the transaction. Since the assessee has already discharged his liability in proving Identity, creditworthiness and genuineness of the transaction addition made by Ld. A.O. is bad in law, uncalled for and may kindly be deleted. 3. That on the fact and on the circumstances of the case, Ld. AO erred in making addition of Rs. 76,20,000/- towards share application money raised is bad in law, against law of natural justice and uncalled for and may kindly be deleted. The Learned Assessing Officer has made adhoc disallowance of Rs. 76,20,000/- towards share application money raised by the assessee from the applicants, on the premises as stated below: 8 ITA No. 75/RPR/2018 A.Y.2013-14 (i) That the PAN of Mr. Vipin Tanna (HUF) appeared to be invalid. The PAN Number of the share applicant is AADHV7582H and is verified to be correct as per the details with the income Tax Department. Assessee affirms the validity of the PAN of the share applicant. Considering the validity, no discrepancies appear and the transaction is quite reasonable. Thus disallowances made are uncalled for and may kindly be deleted. (ii) That the credit worthiness of the applicants couldn't be proved from their Income Tax Returns of the 3 years. All the share applicants are regularly assessed to tax and all the transaction through banking channel only and amount invested is out of their own capital. Assessee affirms the genuineness of the transaction and creditworthiness of the applicants. Considering the credit worthiness of the applicants, the amount realized by the appellant is quiet reasonable. Also the share application money raised by the has been refunded in full subsequently. Thus disallowances made are uncalled for and may kindly be deleted. Thus, making disallowance to prevent the evasion of taxes is not justified, against the law of natural justice and expenses as claimed may kindly be allowed. 4. That on the fact and on the circumstances of the case, adhoc disallowance of Rs. 7,45,825/- towards staff and labour expenses claimed is bad in law, against law of natural justice and uncalled for and may kindly be deleted. The Learned Assessing Officer has made adhoc disallowance of Rs. 7,45,825/- towards salary and allowances expenditure, staff and labour welfare expenses, incentive to employees, salary expenses to marketing staff and labour and wages claimed by the assessee on the premises as stated below: (i) That the same set of employees were getting salary, salary to marketing staff, incentives and commission. The assessee is engaged in the business of Real Estate and the salaries paid to the employees, are expenses in the normal course of business, the incentives offered to the employees are in addition to the basic salaries for the better quality of work provided by them. Salaries to the marketing staff are in addition to their basic salary and are paid for their efforts to attract the customers for purchasing Plots i.e. in addition to the normal remuneration paid. (ii) That cash payments were made to the labours which couldn't be verified due to non- availability of proper records like register, rolls, vouchers, etc. The nature of business of the assessee justifies making cash payment to the labours as they are on daily wages basis. The necessary records for verification have already been produced to the Learned officer. 9 ITA No. 75/RPR/2018 A.Y.2013-14 Assessee affirms the genuineness of the transaction according to the nature of business the assessee is engaged in. Considering the nature of expenses, the amount claimed by the appellant is quiet reasonable. Thus disallowances made are uncalled for and may kindly be deleted. 5. That on the facts and on the circumstances of the case the order passed by Ld. ACIT-4(1) Raipur, is erroneous in law and is against the facts and circumstances of the case. 6. The appellant reserves the right to add, amend, alter and delete the ground(s) of appeal at the time of hearing the appeal. 11 Before us the ld. AR of the assessee argued and reiterated the same submission which were implored before the first appellate authority on each of the ground therefore, the same is taken up for adjudication here in after subsequent paras based on the merits of each addition. 12. The first ground relates to the addition of Rs. 12,42,677/- which is 1/4 th of the total expenditure of Rs. 49,70,210/- incurred by the assessee company on plantation expenses. The ld. AO while making this addition contended that when the bills of these plantations were produced, they appeared to be exaggerated. He has compared the rates of plant with the forest department and with the private nurseries. Based on this analysis he has considered to disallow the 1/4 th of the expenses and added back to the returned income. The ld. CIT(A) has not given any separate findings but reiterated the findings of the ld. AO. 10 ITA No. 75/RPR/2018 A.Y.2013-14 Against this evidence the ld. AR of the assessee submitted that this is an hoc addition without pinpointing any defects or adverse observations on the expenses incurred. The price of the plants is based on the quality and age of the plant and many other factors which are required to seen and the same is thus not comparable. Considering the good quality and longer life of the plants purchase, the amount claimed by the assessee, based on the arm’s length transaction the ad- hoc disallowance is not sustainable and he argued and relied that this bench has in many cases deleted the ad-hoc additions and based on that ratio decision the additions is required to be deleted. The ld. AR of the assessee relying on the written submission stated that once books of account audited and produce before the assessing officer and ld. AO has not pointed out any single defect in the books produced the lumpsum disallowance is not sustainable based on the decision of this bench. Out of the decision relied upon by the ld. AR of the assessee he has heavily relied upon the decision of the co ordinate bench of this bench in the case of M/s D.C. Construction vs. Dy. CIT, Bilaspur vide ITA No. 176/RPR/2016 dated 17.05.2019 where in the co-ordinate bench held that the AO has made a lump sum disallowance without pointing out any concrete evidence against the assessee and lump sum disallowances made by the AO was deleted. 11 ITA No. 75/RPR/2018 A.Y.2013-14 13. Per contra on this issue the ld. DR has relied upon the finding of the lower authorities and reiterated that the based on the findings of the AO the addition should sustained and has not filed any contrary decision against the submission made by the ld. AR of the assessee. 14. Based on the argument of both the side and submission and case law relied upon by the ld. AR of the assessee we respectfully following the Co-ordinate Bench decision relied upon by the ld. AR of the assessee and the fact being identical we considered the plea of the assessee and the following judicial precedent the addition of Rs. 12,42,77/- made by the Assessing Officer is hereby deleted as the Assessing Officer and ld. CIT(A) could not find any defect in the books ad-hoc disallowance without pointing out any specific defect ad hoc disallowance not sustainable. Therefore, the addition of Rs. 12,42,677/- made by the lower authorities deleted and this Ground No. 1 raised by the assessee is hereby allowed. 15. The second ground raised by the assessee is for addition of Rs. 27,00,000/- towards the unsecured loans taken by the assessee company. The ld. AO while making this addition stated that the creditworthiness could not be proved as his lender files an annual 12 ITA No. 75/RPR/2018 A.Y.2013-14 income tax return of Rs. 4,46,321/-. He also stated that balance sheet could not substantiate his credit worthiness and thus, he has added a sum of Rs. 27,00,000/- as unexplained money in the hands of the assessee. The ld. CIT(A) stated in his order that AO has addressed the issue in proper perspective of the loans and accordingly he has refrained to give his own findings and confirmed the addition. On this issue the ld. AR of the assessee submitted that the observation of the ld. AO are in general in nature. He has not seen the following aspect in respect of this depositor; a) The lender is regularly submitting the Income Returns from past so many years. b) The financial statement of the lender was provided where in the loan transaction is duly reported and the loan imparted to the assessee separately reflected in his financial statement. c) The money has been given by an account payee cheque. d) There is no cash deposit in the bank of the lender prior to imparting of loan. e) Assessee has submitted copy of PAN, Confirmation of loan account, Extract of bank statement, ITR acknowledgment, computation of income & financial statement in support of identity, creditworthiness and genuineness of the transanction. 13 ITA No. 75/RPR/2018 A.Y.2013-14 The ld. AR of the assessee submitted that by submitting this evidence the primary onus casted upon him is duly discharged and the reason behind which the addition made is not sustainable based on the documents placed on records and thus he has requested for the relief. 16. Per contra on this issue the ld. DR has relied upon the finding of the lower authorities and reiterated that based on the findings of the AO the addition should sustained as the capacity of the lender is not established on the ITR filed by the assessee and based on the financial submitted. 17. We have persuaded the arguments of the both the parties and also gone through the evidence placed on record. Based on the submission made by the ld. AR of the assessee we found force in his arguments that the primary onus to established the identity, creditworthiness and genuineness of the transaction has been evidently established and ld. DR did not controvert any of the evidence placed on record and we hold the addition of Rs. 27,00,000/- made by the lower authorities are unwanted and required to be deleted. Thus, the Ground No. 2 raised by the assessee is hereby allowed. 18. The third ground of appeal raised by the assessee is for addition of Rs. 76,20,000/- towards share application money raised by the assessee. The said share application money also refunded by the assessee. The details of the parties from share application money received is as under: 14 ITA No. 75/RPR/2018 A.Y.2013-14 S. No. Particulars PAN Raised (Rs.) 1. Bina Tanna ADIPT4918P 11,30,000.00 2 Varsha Tanna ADIPT4919N 7,50,000.00 3 Vipin Chandra Tanna ABOPT8036A 15,40,000.00 4 Vipin Tanna (HUF) AADHV7582H 14,00,000.00 5 Mohd. Akram Khan AUDPK9500A 15,00,000.00 6 Poonam Ubodweja AAHPU4290P 13,00,000.00 Total 76,20,000.00 The ld. AO stated that the particulars of above persons were verified. As regards their identity, genuineness and creditworthiness to raise such huge amount. He has stated that ITRs for 3 years were verified and analyzed. Out of them the PAN of Vipin Tanna HUF appeared INVALID. In the course of verification it was found that, some them (e.g. Varsha Tanna ) are salaried employees of the company who are getting a mere salary of around Rs. 12,000- Rs.20,000/- per month. Their returns of 3 years were also verified and hence, their credit worthiness could not be proved. Therefore, he added a sum of Rs. 76,20,000/- as unexplained money in the hands of the assessee for which he is of the view that the assessee has given the color of the share application money to evade taxes. On the other hand, the ld. CIT(A) stated that the assessee has not made any submission and thus, he has relied on the order of the ld. AO and confirmed the addition without recording any findings. 19. The ld. AR of the assessee submitted that the allegations made by the ld. AO are against the truth placed on record. He has submitted that the PAN Number of the share applicant is AADHV7582H and is 15 ITA No. 75/RPR/2018 A.Y.2013-14 verified to be correct as per the details with the income Tax Department. Assessee affirms the validity of the PAN of the share applicant on the basis of the evidence placed on record. Considering the validity, no discrepancies appear and the transaction is established as genuine. Thus, disallowances made merely on this observation are uncalled for and requires to be deleted. As regards the credit worthiness of the applicants couldn't be proved from their Income Tax Returns of the 3 years. All the share applicants are regularly assessed to tax and all the transaction are entered through the normal banking channel only and are from the disclosed books of both parties and amount invested is out of their own capital which is not disputed. Assessee affirms the genuineness of the transaction and creditworthiness of the applicants based on the evidence placed on record. Considering the credit worthiness of the applicants, the amount realized by the appellant is quite reasonable. Also, the share application money raised by the assessee has been refunded in full in the subsequent year which is accepted and the ld. AR of the assessee submitted the copy of the bank details where in the repayment is reflected. Thus, disallowances made are uncalled for and may kindly be deleted. 20. Per contra on this issue the ld. DR also reiterated the finding of the lower authorities and heavily relied upon the findings of the AO and advanced his argument that the addition should sustained as the credit worthiness of the share applicant is not established based on the ITR filed by the assessee. 16 ITA No. 75/RPR/2018 A.Y.2013-14 21. On this issue we have persuaded the arguments advanced by both the parties and also gone through the evidence placed on record. Based on the submission made by the ld. AR of the assessee that he has placed on record the copy of account/confirmation for all the share applicants along with copy of bank statement highlighting the receipt of share application money. No specific defects were found, no independent observation placed on record to disprove the contentions of the assessee by the revenue and in that situation the primary onus is discharged by the assessee by filling the requisite details whereby he has established the identity, creditworthiness and genuineness of the transaction and ld. DR did not controvert any of the evidence placed on record. The ld. AR of the assessee also submitted the fact that the money has been retuned back to them in the subsequent year proves the fact that the identity of the all the share applicant which has not been disputed by the revenue in that year also. Based on these sets of arguments and evidences placed before us we are of the considered view that the addition of Rs. 76,20,000/- is unwarranted and requires to be deleted. Thus, the Ground No. 3 raised by the assessee is hereby allowed. 22. The last and fourth ground of appeal raised by the assessee is for an addition of Rs. 7,45,825/ made by the AO and sustained by the ld. CIT(A). The ld. AO observed that the assessee is claiming huge expenses related to its employees and labour and further observed that the same set of employees were getting salary, salary to marketing staff, incentives and commission. He further observed that the cash payments were made to labours, and these expenses could not verify 17 ITA No. 75/RPR/2018 A.Y.2013-14 due to non-availability of proper records like register, rolls, vouchers etc. Based on this observation he has made adhoc disallowance of Rs. 7,45,825/- being the 1/10 th of the expenses towards salary and allowances expenditure, staff and labour welfare expenses, incentive to employees, salary expenses to marketing staff and labour and wages claimed by the assessee totaling to Rs. 74,58,257/-. In the appeal filed by the assessee before the ld. CIT(A) he has simply stated that no submissions against the view taken by the AO was made and no material was brought on record against the action of the AO and accordingly he has confirmed the addition. 23. On this issue it is submitted by the ld. AR of the assessee that the assessee is engaged in the business of Real Estate and the salaries paid to the employees, are expenses in the normal course of business, the incentives offered to the employees are in addition to the basic salaries for the better quality of work provided by them. Salaries to the marketing staff are in addition to their basic salary and are paid for their efforts to attract the customers for purchasing Plots i.e. in addition to the normal remuneration paid. As regards the contentions that cash payments were made to the labours which couldn't be verified due to non- availability of proper records like register, rolls, vouchers, etc. the ld. AR submitted that the nature of business of the assessee justifies making cash payment to the labours as they are on daily wages basis. The necessary records for verification have already been produced to the ld. AO. Assessee affirms the genuineness of the transaction according to the nature of business the assessee is engaged in. Considering the nature of expenses, the amount claimed 18 ITA No. 75/RPR/2018 A.Y.2013-14 by the appellant is quite reasonable. He further submitted that the books of accounts are duly audited by an independent Chartered Accountant and they are duly supported by the necessary entries in the books of accounts along with the bills, vouchers and signatures of the payee. Thus, the ad-hoc disallowances made are uncalled for and requires to be deleted. The ld.CIT(A) has not given any separate findings but confirmed the findings of the ld. AO. The ld. AR of the assessee submitted that this is an hoc addition without pinpointing any defects or adverse observations on the expenses incurred with specific entry or vouchers produced before the AO. The expenses incurred are purely based on the set of facts and based on nature of business carried out by the assessee. Considering these set of arguments the amount claimed by the assessee, based on set of records placed before the AO the ad-hoc disallowance is not sustainable and he argued and relied that this bench has in many cases deleted the ad- hoc additions and based on that ratio of co-ordinate bench decision, the additions is required to be deleted. The ld. AR of the assessee relying on the written submission stated that once books of account audited and produced before the assessing officer and he has not pointed out any single defect in the books produced the lumpsum disallowance is not sustainable based on the decision of this bench. Out of the decision relied upon by the ld. AR of the assessee he has heavily relied upon the decision of the co ordinate bench of this bench in the case of M/s D.C. Construction vs. Dy. CIT, Bilaspur vide ITA No. 176/RPR/2016 dated 17.05.2019 where in the co-ordinate bench held that the AO has made a lump sum disallowance without pointing out 19 ITA No. 75/RPR/2018 A.Y.2013-14 any concrete evidence against the assessee and lump sum disallowances made by the AO was deleted. 24. Per contra on this issue the ld. DR has relied upon the finding of the lower authorities and reiterated that the based on the findings of the AO the addition should be confirmed and reiterated the contentions of the AO as recorded in the assessment order. 25. Based on the argument of both the side and submission and case law relied upon by the ld. AR of the assessee we respectfully following the Co-ordinate Bench decision which is relied upon the ld. AR of the assessee and the fact being identical we considered the plea of the assessee. Therefore, the ratio laid down by the Co-ordinate Bench and the following judicial precedent of the bench the addition of Rs. 7,45,825/- made by the Assessing Officer is hereby deleted as the Assessing Officer and ld. CIT(A) could not find any defect in the books and thus, ad-hoc disallowance without pointing out any specific defect not sustainable. Therefore, the addition of Rs. 7,45,825/- made by the lower authorities deleted and this Ground No. 4 raised by the assessee is hereby allowed. 26. The last two ground are general and educative in nature does not require adjudication. 27. In the result, the appeal of the assessee is allowed. 20 ITA No. 75/RPR/2018 A.Y.2013-14 Order pronounced under rule 34(4) of the Appellate Tribunal Rules, 1963, by placing the details on the notice board. Sd/- Sd/- RAVISH SOOD RATHOD KAMLESH JAYANTBHAI JUDICIAL MEMBER ACCOUNTANT MEMBER / RAIPUR ; +( ं / Dated : 19 th July, 2022 *Ganesh Kumar (े* # $, - .े- $ / Copy of the Order forwarded to : 1. / The Appellant. 2. ! / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. - / 0 $ , , 1, / DR, ITAT, Raipur Bench, Raipur. 6. 0 2 3 4 / Guard File. (े* / BY ORDER, 5 1 / Private Secretary , / ITAT, Raipur. 21 ITA No. 75/RPR/2018 A.Y.2013-14 Date 1 Draft dictated on Sr.PS/PS 2 Draft placed before author Sr.PS/PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order