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2012 (5) TMI 86 - PUNJAB AND HARYANA HIGH COURTExpenses booked on accrual basis and receipts on actual receipt basis and not account for work-in - progress in the closing stock – Held that:- Assessee has followed mercantile system of accountancy in regard to the expenditure incurred during the year and results were declared on actual receipt - this method is constantly followed by the assesse since last so many years - addition of the amount received in the next year in the month of April should not have been added in the previous year merely on the basis of bills issued and expenditure shown in the assessment year - in favour of the assessee. ITAT deleted the addition made by the AO on account of investment made by the three partners with the assess firm – Held that:- The three partners are income tax assessees and copies of their returns of income were furnished during the assessment proceedings - contribution made by the partners shown in their respective returns could not be said to be from unknown sources of income - in favour of the assessee. Disallowance on account of the purchases of the material and hire charges of the dumper/tractor – Held that:- assessee never produced before the Assessing Authority proof of genuine transactions despite of giving repeated opportunities – finding of no illegality or perversity in the observations made by Authorities as finding of facts recorded are based on logic and does not require interference – against assessee.
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