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2012 (6) TMI 325 - AT - Income TaxUnexplained expenditure - addition - source and veracity of expenditure stands explained by assessee - Held that:- CIT(A) has rightly held that provisions of Sec.69C will not be applicable as the Assessee has explained the source of the expenditure debited in the P/L A/c which was the amount adjusted payable to SG Takshila Enterprise Company Pvt.Ltd. which the latter agreed to be treated as contribution towards monies payable for acquiring shares of the assessee. Further, AO, after verifying the bills produced by assessee has failed to bring on record any material to suggest that any of such expenditure was bogus or not for the purpose of setting up of the business. Also, once the nature of the expenses is found to be in relation to the business then the quantum of such expenses cannot be as a general rule be enquired into by the AO. Dis-allowance u/s 40(a)(ia) - pre-operative expenses - Held that:- Once it is accepted that the payments were reimbursements and were at actual then the question of deduction of tax at source will not arise. Copies of the quarterly TDS returns reveal that requisite TDS has been deducted and paid wherever required. Dis-allowance stand deleted. Dis-allowance u/s 40A(3) - Held that:- Provisions of Sec.40A(3) were also not applicable as the payments were made by the assessee by cheques - Decided in favor of assessee
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