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2016 (2) TMI 1088 - AT - Income TaxAddition on account of sundry creditors - Held that:- Assessee has submitted the details of sundry creditors in the paper book at page 1 to show that in assessment year 2008-09, sundry creditors were of ₹ 90.28 lacs which is reduced to ₹ 29.34 lacs in the assessment year 2009-10 and in assessment year 2010-11, the sundry creditors are of ₹ 32,73,524/-. He has, therefore, submitted that sundry creditors have reduced from assessment year 2008-09 and this fact has not been examined by the AO. Therefore, the entire addition is wholly unjustified. The ld. DR also contended that this fact can be examined at the stage of AO. In view of the above, we set aside the orders of the authorities below and restore this issue to the file of AO with direction to re-decide this issue. Addition of purchase of fixed asset u/s. 68 - Held that:- The assessee produced annexure to the audited accounts in respect of the above additions made to the fixed assets on which depreciation has been claimed. The audited account shows that the assessee made addition of ₹ 25,29,893/- to the fixed assets. It would, therefore, show that these purchases have been shown in the books of account and have specifically shown in the audited accounts. Therefore, the nature and source of the same have been explained by the assessee and as such could not be treated as unexplained investment made in the purchase of fixed assets. Therefore, no addition could be made u/s. 68. May be, for nonproduction of bills for assets purchased, the AO could have disallowed the depreciation but such an issue is not relevant to the addition made u/s. 68 Disallowance of provision of expenditure made, salary and wages, purchase and other Misc. expenses - Held that:- Instead of making huge additions on account of disallowance, out of various expenses under the four heads as above, it would be reasonable and appropriate to make addition of ₹ 10,00,000/- in all to the income of the assessee to meet out the ends of justice and objections of the authorities below. In view of the above discussion, we modify the orders of the authorities below and instead of making addition on account of disallowance of various expenses in a sum of ₹ 29,60,560/-, ₹ 40,92,568/-, ₹ 29,72,852/- and ₹ 6,17,389/-, the authorities below shall restrict the addition to ₹ 10,00,000/- in all in respect of these additions. We accordingly, set aside the orders of the authorities below and restrict the addition to ₹ 10,00,000/- only under the disallowance of above expenditure under four heads. This ground of appeal of the assessee is partly allowed.
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