Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (1) TMI 737 - ITAT DELHIAddition/disallowance on account of pay channel expenses - Held that:- The dispute arose when the AO noticed that the assessee had sold its business w.e.f. 1.8.2007 and the AO disallowed proportionate amount i.e. 1/5th of actual expenditure estimate related to August 2007 without bringing out any other adverse fact or material. In the present case, undisputedly during FY 2007-08, the sale of business of the assessee was in process and there cannot be a cut off date of expenditure, if expenditure has been incurred for the purpose of business and the same cannot be recovered from the purchaser of the business, then the claim of the assessee cannot be disallowed on proportionate and estimate basis and the same is allowable u/s 37 of the Act. Hence, we are of the view that the AO was not justified in making part disallowance in this regard and the CIT(A) was not justified in upholding the same. - Decided in favour of assessee. Interest on advance given - CIT(A) deleted the addition - Held that:- AO made addition by taking a hypothetical approach and without any basis which was rightly deleted by the CIT(A) on the basis of conclusion arrived after logical analysis of the details, evidence and submissions of the assessee. The probability or improbability of realisation has to be seen and considered in a realistic manner and no addition can be made in this regard without bringing out the fact that the interest really accrued to the assessee. - Decided against revenue. Channel placement income - CIT(A) deleted the addition - Held that:- Income tax cannot be levied on hypothetical income. As per taxation jurisprudence, income accrues when it becomes due but also be supported by a corresponding liability of the other party (s) to pay the amount, only then for the purpose of taxability it can be said that income is not hypothetical and it has really accrued to the assessee. In the present case, the revenue authorities below miserably failed to substantiate this fact that the assessee actually earned income from channel placement and the same was accrued to the assessee company during financial year under consideration. Accordingly, we are inclined to hold that the AO made addition without any basis which was rightly deleted by the CIT(A).- Decided against revenue. Disallowance of provision for expenses - CIT(A) deleted the addition - Held that:-AO misinterpreted the accounting details of payment of salary made by the assessee company to its staff. The assessee company made provision of ₹ 17 lakh which was utilized for making payment to the staff and the amount of payment made by the assessee from 30.06.2008 to 30.09.2008 was ₹ 17,03,030/- and the same fact has not been disputed by the DR. Accordingly, the CIT(A) was right in deleting the disallowance and addition made on this issue and we are inclined to hold that there is no ambiguity or perversity in the impugned order and we uphold the same.- Decided against revenue.
|