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2014 (11) TMI 377 - AT - Income TaxPayments for job works, salaries and wages disallowed Held that:- The assessee has maintained books of account and the audited statements/Form 3CD which were furnished before the AO - In the absence of any evidence or finding to this effect being rendered, a summary, ad hoc disallowance of the kind made by the AO is not tenable the AO has not assigned any reason for pegging the disallowance at 20% of the total expenses claimed - CIT(A) rightly pointed out that only the amount claimed as an expense in the profit and loss account can be considered for disallowance and not the amount shown as outstanding in the balance sheet thus, the matter is required to be remitted back to the AO for fresh examination of the issue Decided in favour of revenue. Interest on advances receivable Held that:- The advances have been given to related parties and that no interest has been charged on the advances - the assessee is paying interest @ of 9% to HDFC Bank for overdraft facility the AO has not examined whether there was any nexus between the Bank funds and the amount advanced to related parties the facts of the issue are not clear thus, the matter is remitted back to the AO for proper examination and verification Decided in favour of Revenue. Commission payable Genuineness of creditors Held that:- Commission payable was the opening balance as on 1-4-2005 in the assessee's balance-sheet under the head 'sundry creditors' CIT(A) was rightly of the view that the assessee actually claimed an amount of ₹ 80,000/- as the brokerage the AO was not correct in disallowing the amount as appearing in the balance sheet against the claim made in the Profit and Loss account the order of the CIT(A) is upheld Decided against revenue.
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