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2016 (6) TMI 1413 - AT - Income TaxDisallowance of expenditure - only objection of the Revenue before this Tribunal is that the Assessing Officer has not said anything in the remand report about the other expenditure even though he has objected about the professional and consultancy charges, customs duty penalty, discarded assets written off, ROC filing fees and financial expenses - HELD THAT:- This Tribunal is of the considered opinion that when the CIT(A) has called for a specific remand report on the basis of the material on record in respect of the expenditure and the Assessing Officer found that only the expenditure relating to rent charges, professional and consultancy charges, customs duty penalty, discarded assets written off, ROC filing fees and financial expenses cannot be allowed which comes to the extent of ₹ 3,66,23,924/-. In respect of other expenditure, he has not made any comments. Therefore, the presumption is that the Assessing Officer has nothing to comment on the remaining expenditure. In other words, the Assessing Officer has satisfied about the expenditure claimed by the assessee. Share capital advance - assessee has not filed the names and addresses of the persons who paid the capital advance, therefore, the AO made addition - HELD THAT:- As rightly submitted by the ld. Counsel for the assessee, there is no allegation that the share application money was emanated from the corpus of the assessee. The assessee has filed the names and addresses of the share applicants. Therefore, it was for the Assessing Officer to examine further. Merely because the share applicants are from Andhra Pradesh, that cannot be a reason to disallow the claim of the assessee. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority. Accordingly, the same is confirmed. Reopening of assessment u/s. 147 - HELD THAT:- It is an admitted fact that the assessee has not filed the return of income in the regular course. Therefore, the Assessing Officer issued a notice u/s. 148 on 8.2.2010. Subsequently a notice u/s. 142(1) of the Act was also issued. Consequent to the notices issued by the Assessing Officer u/s. 148 and 142(1) of the Act, the assessee has filed the return of income on 7.12.2010 disclosing a loss. In those circumstances, this Tribunal is of the considered opinion that the Assessing Officer has rightly reopened the assessment. Addition u/s 40(a)(ia) - rent and professional and consultancy charges paid by the assessee - HELD THAT:- As rightly found by the CIT(A), rent and professional and consultancy charges paid by the assessee was not subjected to TDS, therefore, the same has to be disallowed u/s. 40(a)(ia) - The assessee has not filed any material either before the Assessing Officer or before this Tribunal the nature of the penalty paid by the assessee to the customs Department. Penalty for contravention/violation of law cannot be allowed as business expenditure. The discarded assets to the extent was also disallowed by the AO. The details of discarded assets are not available on record. It is not known whether the discarded assets are stock-in-trade or capital asset used as tool for carrying on the business. In the absence of any supporting material and the details of the machinery/assets discarded, this Tribunal is of the considered opinion that the matter needs to be reconsidered by the Assessing Officer. Accordingly, the orders of the lower authorities are set aside in respect of disallowance of discarded assets and remand back to the file of the Assessing Officer for reconsideration. The Assessing Officer shall reexamine the issue and bring on record the nature of the assets discarded and thereafter decide the issue in accordance with law after giving reasonable opportunity to the assessee. No material is available on record with regard to the claim of financial expenses. Therefore, the CIT(A) has rightly confirmed the financial expenses. This Tribunal do not find any reason to interfere with the order of the CIT(A). Accordingly, the same is confirmed.
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