Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (3) TMI 399 - AT - Income TaxWrong claim of credit of TDS - Addition of closing balance of customer advance – Held that:- The receipt of the amount being advance for mobilization would not change the work actually completed by the assessee till the end of the financial year relevant to the assessment year under consideration - The advance is not for the work completed but it is only the advance to be adjusted over the period of term of contract as per the terms and conditions agree between the parties - the receipt of amount does not effect the income recognize on mercantile system of accounting and as per AS-7 - the addition made by the authorities were purely on the ground that the assessee has claimed credit of TDS in respect of advance receipt is highly arbitrary and unjustified when the assessee has withdrawn the said claim though, it was not allowed by the AO – thus, the AO is directed to delete the addition made on account of wrong TDS claim and disallowed the credit of TDS claimed by the assessee. Disallowance u/s14A of the Act – Held that:- The Assessing Officer has not given specific finding that the assessee has utilized the borrowed fund for the purpose of investment in the mutual fund yielding the exempt dividend income - Thus, the disallowance of interest u/s 14A is set aside and the matter remitted back to the AO for a limited purpose of verification - Rule 8D is applicable for the year under consideration therefore, the disallowance of administrative expenses has to be computed as per the formula provided in Rule 8D - the disallowance work out under Rule 8D cannot exceed the total expenditure claimed by the assessee which can be apportioned to the exempt income – thus, the AO is directed to recompute the disallowance. Disallowance of community development expenditure – Held that:- The AO has shown total disregard and defiance to the orders of the FAA by picking and choosing the particular words instead of the finding of the Appellate Authority - the AO has acted in a most irresponsible manner - When the Assessing Officer did not choose to challenge the order of the CIT(A) then it is highly inappropriate to not give effect to the same – thus, the AO is directed to allow the claim of the assesse - Decided partly in favour of Assessee.
|