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2014 (12) TMI 569 - HC - Income TaxIn-genuine expenses disallowed while some of the expenses allowed by Tribunal - Whether the Tribunal is right in deleting the addition made on account of in-genuine expenses as the assessee failed to substantiate the same despite giving opportunity to explain – Held that:- The order of the ITAT is based upon a correct appreciation of the material on record - the tribunal not only noticed the net profit rate of the assessee for the AY 2006-07 but as well as of the subsequent year 2008-09 which had been accepted by the AO - while accepting expenses claimed by the assessee in respect of the same kind of work got done from various firms - the assessee had declared net profit in the previous AY i.e. 2006-07 against the gross receipt of ₹ 84,88,534/- being direct expenses incurred on hoardings and painting were accepted by the revenue as the net profit in that assessment year was 3.56% only - Whereas for the relevant AY 2007-08 the net profit rate was shown at 5.23% which was better than the rate accepted in the last year – assessee rightly contended that its claim of having incurred expenses towards hoarding, flex structure and paint were a necessary part of business being direct expenses, the Tribunal rejected the claim of the assessee with regard to the other disallowance – the order of the Tribunal is upheld – Decided against revenue.
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