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2014 (11) TMI 140 - AT - Income TaxDeletion u/s 14A GP estimated Held that:- CIT(A) rightly held that the AO has ignored the claim that difference is due to shortages and in handling of material, such type of shortages are bound to incur - total shortages found for wash cotton during the year is 44119 kgs which is just 0.18% of total purchases of wash cotton and same is very negligible - the addition made by AO treating the difference in quantity as per stock movement register and books of account as inflated purchases for ₹ 17,06,797 is deleted and consequential addition of gross profit of ₹ 1,00,000 is also deleted Decided against revenue. Calculation of deduction u/s 80IA and u/s 80HHC - Income from insurance commission and power generation to be included or not Reduction of deduction u/s 80IA/80AB - Held that:- As decided in assessees own case for the earlier assessment year, the decision in Dy.CIT vs. Blue Bell Polymers (P.) Ltd. [2008 (6) TMI 346 - GUJRAT HIGH COURT] relied upon wherein it has been held that the deduction can be granted for both u/s 80HHA and 80I of the Act simultaneously without reducing the relief available u/s 80I of the Act by the amount of deduction granted u/s 80HHA Decided against revenue. Computation of deduction u/s 80HHC - 90% of gross interest receipt to be included from eligible profit under clause (baa) of the Explanation or not Held that:- The contention of the assessee is required to be verified by the AO thus, the matter is remitted back to the AO for verification and adjudication Decided in favour of assessee. Deletion of amount of sale of oil tins out of books Held that:- CIT(A) rightly was of the view that the AO has made addition purely on assumption and without bringing any corroborative evidence to establish that in case of appellant, inflated purchases have been recorded in the books of account - AO has ignored the claim of appellant that difference is due to shortages and in handling of material, such type of shortages are bound to incur - Even in case of assessee, such shortages are 0.10% to 1% of total purchase made during the year - the addition made by AO treating the negligible difference in quantity as per stock movement register and books of account as inflated purchases for ₹ 13,91,547 is deleted and consequential addition of gross profit of ₹ 1,00,000 is also deleted Decided against revenue. Foreign traveling expenditure disallowed Held that:- CIT(A) has confirmed the addition by rightly observing that the expenditure has been debited in the books of account which have been approved by Board of directors however as assessee has not submitted any proof regarding foreign travelling expenditure claimed in profit and loss account - the assessee has not placed any supporting evidence on record thus, the order of the CIT(A) is upheld Decided against assessee. Validity of addition based on the documents found and seized at the time of search Held that:- CIT(A) rightly recorded that seized papers have been found from the premises of Vimal House where various companies are operating and number of staff is working. Loose paper found from such house on the basis of which AO has made addition does not bear the name of appellant company - The AO has not issued any notice during the course of assessment proceedings for making any explanation of appellant company but same was asked to Gujarat Spices & Oil Seed Growers Co-op. Union Ltd. - AO has not brought any other evidence to support his plea that such transactions belong to appellant company and addition has been made on presumption/assumption - the loose-papers seized from the premises of the Vimal House, where various companies are operating and number of staff are working - the name of the appellant-company is not mentioned the order of the CIT(A) is upheld Decided against revenue.
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