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2013 (1) TMI 35 - AT - Income TaxDifference between the income appearing in TDS certificate and income offered for taxation - TDS claim on advance against running contracts - Credit for TDS in the Income tax return amounting to Rs. 6.18 crores - Corresponding amount reflected in the said TDS certificates is to the tune of Rs. 259.42 crores - Assessee has shown contract sales of Rs. 306.73 crores after reducing advance of Rs. 29.08 crores - The said advance of Rs. 29.08 crores has not been considered as income but considered as liability in the balance sheet - Accounting Standard 7 Held that:- A.O. has not pointed out any specific defect or discrepancy in the books of accounts. No doubt it is not only the right but also the duty of the A.O. to consider whether or not the books disclosed the true state of accounts and the correct income can be deduced therefrom. The procedure of the A.O. is of judicial nature and in making the assessment he should proceed on judicial principles. If evidence is produced by the assessee in support of its return it should be accepted unless it is rebutted by admissible evidence and not by mere hearsay. In favour of assessee Disallowance u/s 40(a)(ia) TDS deducted but paid after due date - Payment of expenditure made before last month of A.Y. on which TDS was deducted but paid after 31st March Held that:- Amendment to the provisions of Sec. 40(a)ia), by the Finance Act, 2010 is applicable retrospectively from 1.4.2005. Undisputedly the payment of TDS has been made before due date of filing of the return. Return has been filed u/s 139(1), therefore, no disallowance can be made on account of non-payment of TDS u/s 40(a)(ia) on these facts. Therefore, the order of CIT(A) remained uncontroverted. In favour of assessee Addition on account of non-inclusion of excise duty in the closing stock of finished goods Adjustment of excise duty in valuation of closing stock of finished goods - A.O. argued that these amounts have not been included in the valuation of closing stock of finished goods in terms of provisions of sec. 145 Held that:- The excise duty relating to closing stock of finished goods was Rs. 63,61,688/- out of which Rs. 51,68,020/- has been shown to be paid in view of the provisions of sec. 43B in respect of clearance up to 31st July 2008 and balance amount of Rs. 11,93,668/- has already been added in the computation as disallowance u/s 43B, therefore, if the contention of the department is accepted, then this would amount to double addition because of the reason that assessee has added itself and as the same was paid before the due date of filing of the return and therefore to this extent the amount was claimed as deduction on account of excise duty paid. In favour of assessee Addition on account of non-inclusion of excise duty in the closing stock of raw material Adjustment of excise duty in valuation of closing stock of finished goods - A.O. argued that these amounts have not been included in the valuation of closing stock of finished goods in terms of provisions of sec. 145 - Assessee has maintained exclusive method Held that:- The opening balance on account of excise duty is also adjusted and thereafter closing amount of excise duty is also adjusted and if both these amounts are taken into consideration then there is no effect of computation of income. Restore this issue to the file of A.O. to examine the issue afresh in view of our observations above and after affording opportunity to the assessee of being heard. Remand back to AO Addition on account of Bad debt Held that:- Following the decision in case of T.R.F. LTD. (2010 (2) TMI 211 - SUPREME COURT) that there is no dispute that these amounts were written off in the books of a/c on account of irrecoverable. In favour of assessee Disallowance u/s 14A Rule 8D Expenditure incurred on earning exempt income Held that:- Issue needs fresh consideration in accordance with the decision in case of Minda Investments Ltd., (2010 (10) TMI 126 - ITAT, NEWDELHI). Remand back to AO
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