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2014 (4) TMI 711 - HC - Income TaxAddition of wastage – Held that:- The Tribunal rightly held that the assessee had claimed wastage 8.84% and shown gross profit rate of 10.75% - the wastage that was claimed in the assessment year was more or less similar to that claimed in the preceding assessment year - this was not a case of inflating the expenses or claiming unreasonable expenses on account of wastage - once having rejected the books of account, AO could not have made further additions by relying upon the same books – the order of the Tribunal upheld – Decided against Revenue. Addition on account of undervaluation of stock – Held that:- The Tribunal rightly held that merely because the assessee did not maintain certain details on the computer was no ground for rejecting the explanation given by the assessee – thus, the order of the Tribunal is upheld – Decided against Revenue. Disallowance of job charges paid – Held that:- The Tribunal rightly held that merely because initially there was a discrepancy, was no ground to make the addition once the assessee had explained the discrepancy in the books of account - the AO had not made proper investigation in the matter0 thus, it could not be said that the assessee had inflated the job charges – the order of the Tribunal is upheld – Decided against Revenue. Addition of salary expenses – Held that:- Tribunal found that the profit ratio of the assessee was better as compared to the earlier years and it would be reasonable to make a lump sum addition to protect the interest of the revenue -The Tribunal set aside the additions and made a lump sum addition of Rs. 2 lakh – the order of the Tribunal is upheld – Decided against Revenue. Addition of unsecured loans u/s 68 of the Act – Disallowance of interest expenses – Held that:- The Tribunal held that the assessee had been able to prove the identity of the creditor and the genuineness of the transaction in the matter - upon issuance of the summons to the creditor, Mr. Prem Ratan Sharma, he had responded to the same and filed reply before the AO - the AO did not ask the assessee to produce the creditor for examining him nor did he bring any evidence on record that the cash deposits in the bank account of the creditor came from the side of the assessee - the assessee had been able to prove the identity of the creditors, genuineness of the transaction in the matter and creditworthiness of the creditor, the Tribunal found no reason for making the addition treating the same as unexplained cash credit – the order of the Tribunal is upheld – Decided against Revneue.
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