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2012 (7) TMI 104 - ITAT, MUMBAIUnexplained Investment - advance for construction of vessel - addition made on ground of difference in value shown as advance in balance sheet of assessee and amount shown in books of holding foreign company - rejection of books of accounts - Held that:- In present case, assessee in its books of accounts has recorded the investment of ₹ 18.85 crores and such investment is fully supported by relevant material, simply because M/s Coeclerici Logistics S.P.A. has recorded different amount i.e. ₹ 23.22 crores in its balance sheet for the year ended on 31st March 2006 on the basis of its own accounting method and considering the fact that the assessee was not required to make such payment before the delivery of the vessel and further the assessee has filed relevant material to show that such payment was made by the assessee as per the terms of the agreement in the subsequent assessment years which has also accepted by the Revenue in the said assessment years, we are of the view that in the absence of any material to show that the assessee has made such payment of ₹ 4.36 crores during the FY relevant to AY under consideration, the A.O. was not justified in rejecting the books of accounts and in making such addition. Section 69 is attracted when investment is not recorded in books of accounts, assessee fails to explain or explanation is found unsatisfactory. None of conditions are existing. Order of CIT(A) deleting addition upheld - Decided in favor of assessee. Preliminary expenses - establishment expenses - dis-allowance on ground that assessee has not commenced its business activities and as such the question of claiming deduction u/s 35D does not arise - Held that:- Since agreement with M/s Coeclerici Logistics S.P.A. has taken place on 11-2-2006, therefore, business of the assessee has commenced on 11-12-2006 i.e. the year under consideration and hence both the claims made by the assessee are allowable - Decided in favor of assessee.
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