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 426 - AT - Income TaxDisallowance u/s 40A(3) of the Income tax act - Sweeping statements have been made that most of these payments are exceeding Rs. 20,000/- - Held that:- Authorities below have not identified the payments which were exceeding Rs. 20,000/- which have been said to be incurred in contravention of section 40A(3) - As regards, the other expenditure on electric items & air conditioners, considerable cogency in the assessee’s counsel submission that these related to capital purchase and hence, cannot be treated as payments in violation of section 40A(3) - There is no case of addition of section 40A(3) with regard to purchases that were made on account of capital items. However, for making any addition in this regard it was incumbent upon the lower authorities to make out the detailed list of expenditure which was found to be in violation of section 40A(3) – Issue remanded to the file of AO for fresh examination whether the cash payments were made out of the books of accounts. Rejection of books of accounts u/s 145(3) of the Income Tax Act – Addition of Rs.1.5 Crores – Held that:- Assessee has given detailed explanation regarding the books of accounts and stocks records maintained. Assessee has asserted that AO never asked about the books of accounts. These submissions were before the LD. CIT(A) but were not verified by the LD. CIT(A). Without considering these submissions, LD. CIT(A) has accepted the AO’s finding that books of accounts were not properly maintained - Tribunal in the order for A.Y. 2008-09 has also noted that assessee has maintained proper books of accounts and the system of accounting was under the ERP system - Assertions by the AO that books of accounts and stocks were not properly maintained is not sustainable and hence, this reason for rejection of books of accounts is accordingly not sustainable. AO has rejected the books of accounts u/s. 145(3) of the I.T. Act which is without any basis or justification or even without examination of the books of accounts. While making the lumpsum addition of Rs. 1.5 crore, the AO has not given the basis or justification of the same - No valid basis for addition of Rs. 1.5 crore has been pointed out. It is a pure guess work without any calculation. AO has observed that addition of Rs. 1.5 crore was made to cover up all possible leakages and hence, lumpsum addition of Rs. 1.5 crore was made. Thus, no basis or justification to arrive at the amount of addition – Decided in favor of Assessee.
|