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2015 (12) TMI 765 - AT - Income TaxAddition on account of cash shortage resulting from the excess expenditure incurred - Held that:- Assessing Officer made specific defects in the cash book. The assessee could not be controverted the finding of the Assessing Officer and had not placed any evidence regarding shortage of cash before the lower authorities as well as before us. Therefore, we uphold the order of the ld CIT(A). - Decided against assessee. Disallowance U/s 40A(3) - Held that:- The assessee has paid salary in excess to ₹ 20,000/- and violated the provisions of Section 40A(3) of the Act but it is also revealed that these payments were pertained to salary for the months of May to August. The genuineness of the payments has not been doubted. The employees were insisted upon cash payments only, therefore, to maintain the good relation with them, the company paid cash salary for various months. The Hon’ble Rajasthan High Court in the case of Harshila Chorida Vs. ITO ( 2006 (11) TMI 117 - RAJASTHAN HIGH COURT ) has held that exceptional condition mentioned in Rule 6DD are not exclusive. This was the business expdiencies of the company to pay in cash, therefore, we do not find that these payments are covered U/s 40A(3) of the Act. Accordingly, the addition confirmed by the ld CIT(A) is deleted. - Decided in favour of assessee. Addition on account of expenditure incurred on repair and maintenance treating the same as capital expenditure - Held that:- the assessee has fabricated the evidence at the time of photo copying. Original vouchers were not produced before the ld CIT(A). The genuineness of the expenses has been doubted by the lower authority, therefore, we confirm the order of the ld CIT(A) on this ground - Decided against assessee. Addition on account of cessation of liability U/s 41(1) - Held that:- burden is on the revenue to prove that the assessee has taken deduction in earlier year and there is a write-off bilateral. In assessee’s case, even unilateral written off has not been claimed by the company. The other creditors were advance received from the customer to the tune of ₹ 9,41,354/-, which was paid of in later years. The AR of the assessee filed relevant evidences for repayment in subsequent year, which proved that the assessee’s liability was in existence. The revenue has not brought on record any adversary evidence to establish that liability was not inexistence or not paid in the subsequent year. The assessee has shown ₹ 3.60 lacs as security deposit out of this ₹ 2.10 lacs were added by the Assessing Officer in A.Y. 1996-97, which has been deleted by the ld CIT(A). No appeal had been filed by the revenue before the ITAT, therefore, issue is settled. Further remaining amount, the assessee filed confirmation and the ld Assessing Officer had not made any inquiry and established the case that liability is not inexistence. After careful consideration of all the facts and circumstances of the case and written submissions made by the ld AR on Section 41(1) of the Act, we do not find any reason to confirm the order of the ld CIT(A). - Decided in favour of assessee. Disallowance of ESI contribution made U/s 36(1)(x) read with Section 2(24)(10) - Held that:- The ld AR has submitted that the said amount of ESI has been paid before due date of return to the fund. In view of the facts and circumstances, we delete the addition made by the Assessing Officer and confirmed by the ld CIT(A). Accordingly, this ground of the assessee’s appeal is allowed. - Decided in favour of assessee.
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