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2014 (7) TMI 602 - AT - Income TaxUnexplained stock - Excess stock found during survey – Held that:- The claim of the assessee that excess gold and silver found at the time of survey represented the gold and silver received from the customers for remaking/remodelling was not correct - The claim of the assessee is that the goods inventorized at the time of survey also include the goods which were not owned by the assessee but were received by the assessee from its customers for remodeling - AO has not accepted the contention of the assessee on the ground that at the time of the survey, it was stated that the goods received from customers were handed over to the karigars immediately i.e. such goods were not present in the premises of the assessee and consequently not included in the inventory prepared at the time of the survey - copy of the statement which was recorded at the time of the survey was not produced to rebut the contention of the AO - Copy of inventory prepared at the time of survey was also not produced before us by the assessee to point out therefrom that such inventory included the goods received from customers for remaking or remodeling – CIT(A) pointed out that in the affidavits of the karigars it is not stated that they carried out work of repairing/remodelling at the premises of the assessee and kept such goods at the premises of the assessee - no material was brought to controvert the point highlighted by the CIT(A) - in absence of any material, there was no reason to interfere with the orders – Decided against Revenue. Disallowance of Labour payment – Held that:- The assessee has shown receipt for labour charges which was accepted by the AO as income of the assessee - to hold that no labour charge expenses were incurred for earning the labour charges income is not justified without cogent material – CIT(A) allowed labour charge expenses at the rate of 50% of the labour charge receipt which is also without any basis - In absence of any specific defect being pointed out in the vouchers of labour charge expenses, the disallowance made by the CIT(A) is unsustainable – thus, the disallowance under the head ‘labour charge expenses’ is set aside – Decided in favour of Assessee. Disallowance u/s 40(a)(ia) of the Act - Hallmark checking expenses - Held that:- CIT(A) has found that the aggregate of the payments made to Gujarat Board Centre exceeds ₹ 50,000/- during the year and therefore, the assessee was liable to deduct tax at source from payment made to Gujarat Board Centre - assessee could not controvert the finding of the CIT(A) - no infirmity in the order of the CIT(A) in confirming disallowance paid under the head hallmark checking expenses from out of the total expenditure – Decided against Assessee. Deletion of unaccounted income – Held that:- The assessee was asked to furnish details of stocks as per books of account - The documents contained therein reveal that the opening stock of gold available – assessee sold gold weighing 4081.660 gms from 1/4/2007 up to the date of survey - the stock of gold available with the assessee out of the earlier stock of gold on the date of survey was 12,620.201 gms. - After considering the purchase of gold weighing 6712.337gms the AO has worked out the gold available with the appellant on the date of survey as 15,250.878 gms by taking the stock of gold available with the assessee out of the old gold at 538.541 gms. - Revenue supported the order of the AO whereas the assessee supported the order of the CIT(A) - No material has been brought by the Revenue to rebut the finding of the CIT(A) – there was no reason to interfere with the order of the CIT(A) – Decided against Revenue.
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