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2014 (1) TMI 916 - AT - Income TaxDeletion made on account of suppressed production Proportionate wages not paid to the production Held that:- The addition made on the basis of arithmetic comparison of monthly production with monthly wages could not be sustained - The wages are paid by the assessee on per day basis, and not linked to production - The production depends on variety of reasons, i.e. the work order received from the customers, quality of grey material, designing etc. - The assessee has produced the wage register along with its account books and no discrepancy therein could be established on behalf of the Revenue - The higher payment of wages in a particular month by the assessee, may be a good reason to provoke inquiry in this regard, but itself is not sufficient to make any addition/disallowance Thus, the CIT(A) is justified in holding that the basis taken by the AO is misplaced and the books of accounts produced by the assessee are not rejected by the AO - No arithmetic formula to co-relate the wages with the production and estimate the suppression on account of variation in wages, is sustainable Decided against Revenue. Deletion made on account of discount/rate difference expenses Supporting evidence not failed Held that:- The assessee is the best judge for its affairs, and it is the decision of the assessee to provide discount to its customers depending upon the nature and extend of the defect in the product after the job work is done, and the discount allowed may differ from person to person -The complete details were filed by the assessee in this regard and the method of accounting had been constantly followed year after year - The CIT(A) has recorded that all the required details were provided by the assessee in the form of books of accounts, bills and vouchers along with names and addresses, contact details, the amount of job work done and discount/claim/rate difference allowed to each of the customers - The CIT(A) has further recorded that without examining these details and evidences and without making independent inquiry and also without rejecting the books of accounts, the AO has disallowed the expenses - In earlier years also such claims of expenses under the same head have been made by the assessee which have been accepted by the department - in what manner business has to be conducted by the assessee, the AO cannot decide order of the CIT(A) upheld Decided against Revenue.
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