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2014 (5) TMI 620 - AT - Income TaxRestriction of addition - cessation of liability - Disallowance of purchases being not genuine – Held that:- CIT (A) has observed that the GP rate of the assessee firm for the year was better in comparison to the immediately preceding AY – as such, the purchases made by the assessee ought not to have been doubted by the AO - and that if at all, the amounts outstanding to the credit of the three parties in the assessee’s books of account could have been disallowed u/s 41 (1) of the IT Act - CIT (A) restricted the disallowance on account of cessation of liability of credit balance outstanding in the name of the three parties in the assessee’s books - CIT (A) has correctly held that addition needs only be made of the amounts outstanding to the credit of the three parties in the assessee’s books, on account of cessation of liability of credit balance, u/s 41 (1) of the Act – there was no reason to interfere in the order of the CIT(A) – Decided against Revenue.
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