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2014 (9) TMI 1133 - AT - Income TaxReduction in FBT - Held that:- Neither the AOs action of 50% ad hoc disallowance nor CIT(A)’s direction to reduce the disallowance to the extent of 20% and allow corresponding reduction from FBT tax are sustainable. Thus the entire disallowance should be deleted consequently the direction to give reduction in FBT will become non est. Allowing 43B claim - Held that:- No infirmity in the order of ld CIT(A) in allowing the 43B claim to the assesseE since it has not been disputed that amount in question was paid before due date of filing return of income and necessary evidence is brought on the record. Hence this ground of the revenue is dismissed. Allowability of expenditure - Held that:- No infirmity in the order of ld. CIT(A) in respect of expenditure of ₹ 4,75,121/- as it has not been disputed that same pertained to AY 2008-09 and was booked in subsequent year before filing of the audit report. It is trite law that assessee can claim such expenditure relating to a year which is though accounted for in subsequent year but before filing of the audit report. In any case it will amount to postponement of liability and in such eventuality Hon’ble Supreme Court judgment in the case of Excel Industries [2013 (10) TMI 324 - SUPREME COURT ] is also applicable. Therefore, this ground of the revenue is dismissed. Ad hoc disallowance in respect of items of expenditure on Gifts to dealer/mason on dealers/mason meet, Sweets etc. on occasion of festivals/visits of guest/Govt. Officials and Gifts to Govt. Officials/Guests on festival/visi tcannot be made. Assessees books are not rejected and the same are duly audited. We find no force in AOs vague and sweeping observations that expenditure is unverifiable. The expenditure being wholly and exclusively for assessee’s business is allowable. In view thereof, there is no justification in retaining the ad hoc 20% by ld. CIT(A). Consequently the CIT(A)’s direction about FBT becomes infructuous. Revenue ground in this behalf is dismissed and assessee’s grounds are allowed.
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