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2015 (7) TMI 354 - AT - Income TaxDisallowance of expenses claimed u/s 43B, deposit of sales tax and legal expenses - CIT(A) allowed the claim - the business of the assessee was closed down on 28.02.1998, a finding of fact recorded by the ITAT in its own case for A.Y. 2003-04 - Held that:- It is an admitted fact that the assessee made the payment of the sales tax during the year under consideration and also pointed out to the AO that the assessee company was contesting sales tax cases before the Sales Tax Authorities. In the present case nothing was brought on record to substantiate that the assessee did not make the payment of the sales tax liabilities which were outstanding and were disallowed in the earlier years u/s 43B of the Act and since the assessee furnished the evidences for making the payments during the year under consideration which were duly verified by the ld. CIT(A) and no adverse comments were given by the AO in the remand proceedings, therefore, the disallowances were rightly deleted by the ld. CIT(A). As regards to the disallowance out of legal and professional expenses, it is noticed that the AO disallowed the total claim of the assessee on the grounds that the assessee did not file any evidence and that the business operation were discontinued by the assessee. In the present case, the assessee furnished the evidences for making the payments to the various legal firms, the bills relating to those expenses were verified by the ld. CIT(A) and no adverse comment was given by the AO in his remand report except that the business of the assessee discontinued. In our opinion the ld. CIT(A) rightly directed the AO to allow the claim to the extent of ₹ 1,12,500/- for which the assessee produced the evidences and since these expenses were related to the sales tax litigation and for maintaining corporate status it can be said that those were related to the business of the assessee and were rightly allowed. We, therefore, do not see any valid ground to interfere with the findings of the ld. CIT(A) on this issue. - Decided against revenue.
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