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2012 (8) TMI 124 - AT - Income TaxDisallowance of expenditure incurred - CIT(A) deleted the dis allowance - Held that:- Disallowance of hammali/cartage expenses were deleted by the CIT(A) after considering the nature of expenses claimed and turnover of the assessee and has also observed that the similar disallowance made in the assessment year 2001-02 was deleted by the Tribunal - as these expenses were necessarily incurred in the course of business and looking to the amount of expenditure, the same was found to be reasonable - no reason interfere in the order of CIT(A) - in favour of assessee. Disallowance of freight expenses - CIT(A) has retained the disallowance to the extent of Rs. 1 lakh on assessee’s failure to establish deductibility of full amount and deleted the balance by observing that AO has not recorded any finding regarding verifiability of claim of such expenses - partly in favour of assessee. Disallowance of expenditure incurred on salary - CIT(A) by observing that salary was even though paid to family members, but the same was for the work carried out by them and assessee was very much justified in engaging his own family members to discharge the various duties, who was trustworthy compared to the outsiders - amount of expenditure incurred on sales vis-à-vis total turnover of business and nature of business activities of assessee no infirmity in the order of CIT(A) for deleting the disallowance - in favour of assessee. Disallowance of rent payment - CIT(A)restricted THE disallowance to the extent of Rs. 11,500/- by observing that rent to the extent of Rs. 1,80,480/- was reasonable taking the rent at Rs. 2/- per sq.ft., which was also allowed in the assessment year 2001-02, there is no infirmity in the order of CIT(A) for deleting the disallowance on account of rent - partly in favour of assessee. Dis allowance of courier expenses - Dis allowance was deleted by the CIT(A) by observing that there was huge turnover of the assessee and such disallowance was not warranted - in favour of assessee. Dis allowance of stationery expenses - AO disallowed expenses without assigning any reason - no interference in CIT(A)'s order required - in favour of assessee. Dis allowance of 50% of “Misc. Expenses” - Considering over all turnover of the assessee, we restrict the disallowance to the extent of 25% of the expenses so claim - partly in favour of assessee. Dis allowance of Depreciation - As before the AO the assessee has not furnished WDV chart of the fixed assets on which depreciation has been claimed and was furnished for the first time before the CIT(A) -restore this ground back to the file of the Assessing Officer for deciding afresh - in favour of assessee for statistical purposes. Disallowance of commission - CIT(A) deleted it by observing that such commission was being paid to Shri R. S. Narang for last several years for sales promotion considering his long experience of 40 years in the field which was essential for promoting sales of the assessee - in favour of assessee.
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