Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (2) TMI 1096 - AT - Income TaxAddition on account of sundry creditors - Held that:- AO had erred in on the one hand accepting the trading results of the assessee, and at the same time rejecting his books of account. The ld. CIT(A) went wrong in failing to appreciate that such a course of action is impermissible in law. The books of account need to be either accepted, or rejected in totality. And once the trading results of the assessee were accepted, there remained no scope for the AO to make any addition of sundry creditors. Further, even if, for the sake of argument, the aforesaid action of the AO is treated as valid, the one and only course left available to the AO after rejecting the books of the assessee was to proceed u/s 144 of the Income Tax Act and to make best judgment assessment. Per contra, he made addition of sundry creditors, holding that the assessee had not been able to substantiate the existence of the sundry creditors as claimed and thus, they could not be accepted. The ld. CIT(A) was incorrect in sustaining this addition made against the law by the AO. Thus, looked at from any angle, the ld. CIT(A) has fallen into error in sustaining the unsustainable addition made by the AO. The grievance of the assessee in this regard is, therefore, justified. It is accepted. The orders of the ld. CIT(A) on this issue are reversed. - Decided in favour of assessee. Disallowance of car expenses - 10% of car expenses incurred by the assessee in each of the years on account of interest on loan, repair and maintenance and depreciation - use of car for personal purposes - Held that:- Here, the assessee has not been able to controvert the findings of the Taxing Authorities. No log book has been produced at any stage so as to prove that the car had been used exclusively for the business purposes of the assessee and not at all for his personal purposes. The assessee has not even raised any alternative ground that the disallowance for either of the years is excessive. The grievance of the assessee in this regard for both the years is rejected. The disallowances of ₹ 36,034/- for AY 2008-09 and ₹ 31,406/- for AY 2009-10, as confirmed by the ld. CIT(A), are upheld.
|