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2011 (9) TMI 805 - ITAT DELHITrading addition - AO drew monthly P&L a/c on the basis of information given by assessee to the bank for the purpose of availing of the credit facilities, and disallowed the losses incurred by the assessee in some of the months - Held that:- The method of computation of P&L a/c by the AO cannot be approved as this is against the norms of any business or the guidelines issued by the ICAI. In the months where the AO has computed the profit, the same is in the range more than 50 to 79 per cent, which is not possible in any of trading/manufacturing activities. Therefore, CIT(A) was justified in deleting the addition made by the AO - Decided in favor of assessee. Cenvat credit - addition made for difference in Cenvat credit availed of Rs. 75,29,635 as mentioned in Form 3Cd report against cenvat credited to P/L A/c for Rs. 70,45,042 - Held that:- It is undisputed that Credit of excise duty paid on purchases is available from excise duty to be paid on finished goods when the goods will be sold. In the year under consideration, excise duty paid on raw material is more than the excise duty collected on sales. Cenvat Credit available will be adjusted against the excise duty payable in the next year. It will not be liable to tax as it does not constitute income in the hands of the assessee. Miscellaneous adjustments viz liquidated damages on account of delayed supply made to Government, amount received less from the sales made to the public sector undertakings - Held that:- In a case when some deductions are made either on account of liquidated damages or otherwise, the deductions so made will be allowable as business expenditure. In any case the amount which has not been paid by the purchaser cannot be treated as income. Traveling expense incurred on foreign travel expenses - Held that:- In the absence of evidence to prove that the expenditure was incurred wholly and exclusively for the purpose of the business, the dis-allowance made by the AO in respect of foreign travel has to be upheld - Appeal is partly allowed.
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