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2013 (9) TMI 373 - ITAT AHMEDABADDeemed Dividend u/s 2(22)(e) - receipt of loan - assessee contended that since the accumulated profits was not sufficient to cover the transaction, the same should not be treated as deemed dividend. - Held that:- Assessee is a shareholder of KDPML owning more than 10% of its equity. - amount received by the Assessee will have to be considered as deemed dividend but only to the extent of accumulated profits of KDPML as on the date of granting of loan/advance. - matter remitted to the file of AO to determine the extent of ccumulated profits as deemed dividend u/s 2(22)(e) - Following decision of CIT vs. P.K. BADIANI [1970 (2) TMI 3 - BOMBAY High Court] - Decided in favour of Revenue. Disallowance of wages - AO has disallowed the expenses mainly for the reason that the details of wages were not submitted in the format asked for, P.F was deducted only in cases of 53 employees though the Assessee had stated to have employed 197 employees. Further according to the Assessing Officer, there was no co-relation between wages and production figures. - Held that:- Assessee submitted that the wages in proportion to production for A.Y. 2008-09 was Rs.0.7265 per kg. whereas for the year under appeal it was Rs. 0.7297 per kg which is more or less comparable. The Assessee has further stated that the PF was deducted in the cases where it was applicable. Before us, the Revenue could not point out any instance where though the Assessee was required to deduct PF but the same was not deducted. Further the Revenue could not controvert the calculation of wages with respect to the production as submitted by the Assessee. - deduction allowed - Decided against Revenue. Disallowance of packing expenses - Held that:- The non production of details is surprising more so in the light of the fact that Assessee could obtain the tax Audit report of CPC Trading for year ended 31.03.2009. Further just confirming the transaction without any supporting evidence cannot be said to discharging of onus by the supplier. It is also a fact that in the line of business of the Assessee packing material would have been used by the Assessee for supply of goods. - some addition needs to be made in the present case to meet the ends of justice. We therefore feel that a lump sum disallowance of Rs. 25 lac would meet the ends of justice instead of Rs. 1.25 crore being the disallowance of entire purchase made by Assessing Officer. We therefore direct accordingly - Decided partly in favour of Revenue. Unexplained sale of wood - Held that:- Assessee has stated to have purchased the goods on credit. However, no supporting evidence of purchases of credit has been filed by the Assessee either before Assessing Officer or CIT(A). Before us, the learned A.R. could not satisfactorily explain the outstanding of sales for more than one year more so when as per the agreement the payment was to be made immediately. It is not the case of the Assessee that the parties with whom it had entered into transaction are related or known parties which resulted in giving of unusually long credit. - the action of Assessing Officer in disallowing 5% of the sales amount to be justified. We thus upheld his order on this ground - Decided in favour of Revenue. Disallowance of brokerage expenses - Held that:- CIT(A) noticed that certain details called for by the Assessing Officer were filed before him. From the details furnished and placed on record, it is seen that the rate of brokerage in most of the cases was 0.75% except in two cases. Assessee has also placed on record, the copy of confirmations received from the brokers which contains their PAN numbers and address. CIT(A) while deleting the addition has noted that though the remand report was called vide letter dated 21.03.2012 but was received on 13.07.2012 i.e. adequate time was available with the Assessing Officer for examining the evidence. In the time made available by CIT(A), the Assessing Officer had not brought out any material on record to controvert the submissions of Assessee. Further CIT(A) has noted that the brokerage payment is not excessive as compared to earlier years - Decided against Revenue.
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