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2013 (11) TMI 367 - AT - Income TaxAdditions on account of bogus purchases - accommodation bills - AO disallowed only 20% - before ITAT revenue claimed addition of entire amount – Held that:- AO gave a finding that even though the purchases from M/s Triton Infotech Ltd. are by way of accommodation bills, it can not be ruled out that assessee did purchase from grey market. AO only disallowed 20% of the so called purchases which was restricted to the possible savings and tax at 4% - In this case and fact that AO only restricted to 20% of purchases claimed, it is surprising that the revenue now contends that the entire amount is disallowable. When Assessing Officer did not make disallowance of entire amount, ITAT can not improve upon the order of Assessing Officer – Decided in favor of Assessee. Disallowance u/s 14A of the Income Tax Act - Held that:- Appellant has Rs. 77.23 crores interest free funds available with him and advanced loan of Rs. 54.68 crores as interest free. The AO has not denied these facts but only on the presumption that possibility of use of interest bearing funds fro non business purposes could not be ruled out and made an ad hoc disallowance of 50% of interest expenses – Relying upon the judgment of the Hon’ble Supreme Court in the case of Munjal Sales Corporation Vs. CIT [2008 (2) TMI 19 - Supreme Court] held that the disallowance made by the AO on ad hoc basis is not sustainable – Decided in favor of Assessee.
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