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2016 (5) TMI 1307 - AT - Income TaxValidity of assessment u/s 153A - addition share capital and unsecured loans - Held that:- We do not find any merit for the addition made by the AO with respect to share capital and unsecured loans. The disallowance made by the AO on account of personal use of vehicles was on estimate basis, no incriminating material was found to indicate that directors of the company have used the vehicles for their personal purpose. Accordingly, disallowance made by estimating personal elements in respect of expenditure on vehicle is not justified u/s.153A when no incriminating materials in respect to personal use of vehicle were found during the course of search. Since we have already decided the legal issues in favour of the assessee, we are not going into merit of the addition so made. Addition on account of unsupported purchases - Held that:- Copy of Ledger Account of the said party in the books of assessee; copy of Ledger Account of the said party in the books of Assessee Company in which it is reflected the invoices booked and the bank payment made against the said invoices; Copy of bank statement of the Assessee Company from which payment has been made to the said party; and Copy of Ledger Account of M/s. Soma Enterprise Ltd. (Customer) in the books of Assessee Company along with copies of invoices raised by Assessee on said party. For rendering of services to this customer assessee has availed services from M/s. Manav Impex. It appears from the above-mentioned documents that the Assessee Company has made payment to M/s. Manav Impex towards charges for excavation of under-ground tunnel by shaft. The said subcontract work is a part of the main project work undertaken by the Company for M/s Soma Enterprise Limited in relation to the Koyan Dam Project. Further, it was also shown from the copy of bank statement and copy of ledger account that the payments made to M/s Manav Impex was through normal banking channels. We set aside the issue of addition on account of purchase to the file of AO for deciding afresh by considering above documents discussed by us. Disallowance on account of personal usage of car - AO has disallowed suo motu estimated 10% on account of personal use of car by the Director. The assessee is a corporate entity, therefore, in view of the decision of Hon’ble Gujarat High Court in the case of Sayaji Iron & Engg. Co. [2001 (7) TMI 70 - GUJARAT High Court] no disallowance on the plea of personal use can be made in the case of corporate entity. Accordingly, we direct the AO to delete the said disallowance. Determining short term capital gain - Held that:- We have considered rival contentions and found that CIT(A) has already directed the assessee to approach the AO u/s.154 of the Act with the required details for seeking necessary rectification. Accordingly, we do not find any infirmity in the order of CIT(A). We further direct the AO to immediately dispose the application filed u/s.154 for correcting the error in the computation of short term capital gains offered by the assessee. We direct accordingly. Allowing the set off of carry forward loss of earlier assessment years by the CIT(A) - Held that:- In the interest of justice, we restore this issue back to the file of CIT(A) for adjudicating ground with regard to set off of carry forward loss of earlier assessment years. The CIT(A) is also directed to give credit for taxed paid by the assessee or deducted at source while computing tax liability of the assessee.
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