Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (11) TMI 178 - ITAT AHMEDABADIncome of AOP, when it has not offered any income and profit of business has been diverted to the members of AOP Held that:- Assessee A.O.P. has not offered any income since its formation A.O. rejected the books of accounts u/s 145 of the Act and thereafter, after giving credit of recovery made on account of stores and material supplied by Kandla Port Trust at Rs.1,62,87,262/-, worked out the gross receipts at Rs.1,17,33,378/-(Rs.2,80,20,640-Rs.1,62,87,262/-) A.O. estimated the net profit at 5% of the receipts at Rs.5,86,669/- and added in to the income Decided against the Assessee. Applicability of section 40A(2) of the Income Tax Act Held that:- For the purpose of invocation of this section one of the essential ingredient is that where an assessee incurs any expenditure and the AO is the opinion that such an expenditure is excessive, then the unreasonable amount is not to be allowed as a deduction In the present case, AO has also raised a question quote "Now question arises as what is the nature of receipts was it loan/advance/relinquishment of right/gift. Answer is as simple as that these are payments by assessee towards sub-contract for the work executed for Kandla Port Trust" unquote - This aspect requires an indepth adjudication on the basis of the agreements executed between the parties and the constitution of this AOP on the basis of which the alleged amount was transferred in the hands of the members - Restored back to the file of ld.CIT(A) for de novo adjudication.
|