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2015 (4) TMI 222 - ITAT DELHIAddition made under section 40A(3) - cash payment greater than ₹ 20,000/- having been made as evident from perusal of Cash Book - CIT(A) deleted the addition - Held that:- Single voucher was prepared to book the amount which does not mean that entire payment was made in a single day. The payments are not covered under the provisions of section 40A(3) of the Act, except the payments of ₹ 11,493/- (40,000- 28,507) paid on behalf of Kamlesh Bansal and ₹ 29,528/- paid in cash to Harish Express service which are hereby confirmed. The balance addition of ₹ 1,94,974/- [2,35,995/ - (29,528+11,493)] made on this count is, accordingly, hereby deleted - Decided partly in favour of assessee. Difference of salary between salary sheet submitted and profit and loss account - CIT(A) deleted the addition - Held that:- The difference of ₹ 3,88,OOO was on account of the fact that salary register being maintained was for ESI purposes and did not cover the salary of two employees (i.e. Gunjan Chhabra and Vandana Desai) working in Faridabad branch (as they were not covered under the purview of same). The month-wise and branchwise charts of salary for both as per salary register and books of accounts were submitted to the AO. The above difference was also explained by way of another chart wherein details of salary paid to the 2 employees not covered under ESI were also shown. Also, it is pertinent to note that both of these employees have been paid by cheques and they are assessed to income tax. Further, the difference of ₹ 72,153/- was on account of arrears paid to employees which were duly verified by the AO from the books of account during the course of assessment proceedings. Thus AO was not justified in making addition on account of difference of salary as above - Decided in favour of assessee. Disallowance of difference between stock loss claimed and insurance claim made by assessee - CIT(A) deleted the addition - Held that:- The concerned VAT legislation does not provide for availability of input credit against the output tax liability in case of loss of stock by fire, etc. Moreover, the input credit is even not available in a case where there has been normal loss, like evaporation credit is available only in respect of goods which have been or would be actually sold by the dealer. It is on the premise that where the goods have not been disposed by way of sale and there is no output tax liability in respect of such goods, the dealer is not entitled to get the benefit of input tax credit. Thus, the input tax credit is also a loss for the dealer, as VAT department does not allow the availability in view of specific provisions in the Act and the insurance company does not make the payment on account of same in the event of loss. In essence, that also means that in view of input credit reversal, the same is added back to the purchase price and is not available as credit for set-off against output tax liability. Accordingly, the loss on account of fire would need to be calculated based on the purchase price only. Thus, the appellant has satisfactorily explained the difference between stock Loss claimed and insurance claim made by assessee. - Decided in favour of assessee. Disallowance of rent expenses - CIT(A) deleted the addition - Held that:- AO has failed to note the fact that these agreements had an escalation clause and accordingly the rent actually being paid by the appellant after escalation was a sum of ₹ 8,ll,072/-. Further, the other rent payments have also been made by account payee cheques. Tax has been deducted at source under section 1941 of the Act, wherever the payments exceeded the specified limits.The premises-wise details of rent paid by the appellant have been furnished during the course of the assessment proceedings as well as in the appellate proceedings, which have been placed on record. Also, all the depots are registered with the VAT department in the respective states. Thus AO was not justified in making addition on account of rent expenses - Decided in favour of assessee.
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