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2010 (1) TMI 899 - ITAT, MUMBAIBogus purchase / unverifiable purchase - addition on the basis of retracted statement - held that:- there is no dispute to the fact that the assessee could not discharge the onus cast on it by either producing the parties for verification of the Assessing Officer or furnish other circumstantial evidences to satisfy the Assessing Officer regarding the genuineness of the purchases especially when a proforma invoice of the party was found which has been treated by the Assessing Officer as non-genuine. Mere payment of the amount by account payee cheque cannot make a non-genuine transaction as genuine. However, considering the totality of the facts of the case and in the interest of justice, we deem it proper to give one more opportunity to the assessee with a direction to produce the parties before the Assessing Officer for his examination and furnish other circumstantial evidences to the satisfaction of the Assessing Officer to prove the genuineness of the purchases. Deduction u/s 80HHC - set off of interest income received from LIC gratuity fund against interest expenditure - 90% of insurance claim, scrap sale and sundry balances written off should not be reduced from the profits of the business for the purpose of computing deduction u/s. 80HHC without appreciating the fact that receipts from insurance claim, scrap sales and sundry balances written off are not out of main export business of the assessee and are thus covered by the explanation (baa in section 80HHC of the Act, ground raised by the Revenue is accordingly allowed for statistical purposes. Deduction u/s 80HHC - set off of interest income received from trade deposit against interest expenditure - 90% of interest receipts from ICDs, FDs (margin money) and loan given to employees should not be reduced from the profits of business for the purpose of computation of deduction u/s. 80HHC without appreciating the fact that these items of income does not have an immediate nexus with the export business and are covered by the explanation (baa) to section 80HHC of the I.T. Act, 1961, matter remanded to AO, ground raised by the Revenue is accordingly allowed for statistical purposes.
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