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2013 (4) TMI 420 - ITAT CUTTACKUnexplained expenditure - Held that:- It is true that an amount of Rs.1 lac was given to M/s. Pal Regency (P) Ltd. by the appellant by cheque on dt.1.9.2006 through the drawings account in M/s. Pal Constructions. M/s. Pal Regency (P) Ltd. has also paid Rs.1 lac which was shown as unsecured loan and appears in the books of M/s. Pal Constructions as on 31.3.2008. Accordingly, the books of M/S. Pal Constructions show liability of Rs.1 lac against MIs. Pal Regency (P) Ltd. and also show asset of Rs.1 lac through drawings account. The bank ledger in the books of M/s. Pal Regency (P) Ltd. shows that an amount of Rs.1 lac paid to M/s. Pal Constructions by cheque No.830072 on dt.12.10.2007 towards a refund of loan. Accordingly, there is no doubt that the loan given earlier by the appellant from his proprietorship concern to M/s. Pal Regency (P) Ltd. has been repaid, even though the receipts & payments have not been set off against each other and both appear in the accounts. This does not make the transactions unexplained expenditure. Thus addition made by the AO is deleted. Prior period expenses - Held that:- No infirmity in the order of the CIT(A) insofar as the addition of Rs.2 lakhs was factually incorrect when the amount owed and due were combined by the AO for holding the same as unexplained expenditure in the case of the assessee is a mere absurdity and not computation of real income. Similarly, the assessee had returned income of Rs.23,79,787 which included receipt of Rs.16,62,705 was rendered to tax by the assessee could not be considered for finding as no expenditure had been incurred on the same to be taxed again. This again is an absurdity noted by the Assessing Officer which has been properly dealt with by the CIT(A) - appeal of the Revenue dismissed.
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