Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (9) TMI 203 - AT - Income TaxDisallowance of cash discount - details of parties not available - Similar procedure followed in immediately preceding year - Held that:- It is seen that the facts in the present year are different from the facts in assessment year 2004-05 and 2005-06 and, therefore, the decision of the learned CIT(A) cannot be upheld on the basis of principle of consistency - total amount debited under the head cash discount is of Rs.72.83 lacs and the credit under that head is of Rs.3.32 lacs. Apart from that, a debit of Rs.0.55 lacs is on account of rate difference and total net debit is of Rs.70.06 lacs. For such huge amount of claim of the assessee regarding net cash discount, the assessee should have furnished at least the name and addresses of those parties to whom major amount was allowed as discount. In the absence of any details regarding name and addresses of the persons to whom such discount was allowed, it is always possible that there may be some instance of write off of the discount in respect of advances for capital goods etc. or even loans etc. and, therefore, some disallowance is justified on account of this failure of the assessee to furnish reasonable details for such a huge claim of expenditure of more than Rs.70 lacs approximately. The disallowance made by the AO is to the extent of 10% of such claim but we feel that in the facts and circumstances of the present case, ends of justice would meet if such disallowance is restricted to 5% of the total such claim of Rs.70 lacs approximately. Hence, disallowance of Rs.3.50 lacs is confirmed and balance disallowance is deleted. Disallowance of expenditure - Building repairing expenses - Capital or revenue expenditure - Held that:- While the assessee has claimed expenses for fitting of kota stone on various dates in respect of construction of new mill building, but no expenditure is incurred in respect of purchase of kota stone and such expenditure for purchase of kota stone is included in building repairing expenditure without including any labour charges on that account. This supports the stand taken by the AO that these expenses were in fact incurred for construction of new mill building and not for any repairing purpose. Similarly, the details regarding construction of new building as available in the paper book have not included any expenditure on account of colours and paints. The building is completed in the present year because depreciation is duly allowed by the AO with regard to such new mill building, then how it can be expected that no expenditure in respect of colour and paints etc. were incurred for this new mill building and such expenditure included in the details of building repairing is not in fact related to construction of new mill building. In the light of these facts and discussions above, we are of the considered opinion that the deletion of this disallowance by the learned CIT(A) is not on a valid basis Disallowance of dalali (commission) expenses - Held that:- In view of the absurd increase in payment of dalali on sales in terms of percentage of turnover from 0.0284% in the assessment year 2007-08 to 0.0516% in the present year, we feel that the disallowance of small amount of Rs.37,496/- made by the AO is very much reasonable and the order of the learned CIT(A) regarding deletion of the same is not sustainable - Decided partly in favour of Revenue.
|