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2016 (4) TMI 911 - AT - Income TaxAddition towards additional income declared during the course of search - Held that:- The additional income admitted by the assessee during the course of search is not supported by any material evidences gathered during the course of search. Though assessee admitted additional income of ₹ 18,28,000/- by stating that the income is offered to cover up inconsistencies in the past, the assessee has declared the said income in the hands of the T Ramakrishna(HUF) by declaring short term capital gains and income from other sources. Therefore, we are of the opinion that the A.O. was not correct in making separate additions of ₹ 18,28,000/-, when assessee has admitted the income in the hands of Shri T. Ramakrishna(HUF). The CIT(A) failed to appreciate the fact that the undisclosed income offered during search, was admitted in the hands of T Ramakrishna (HUF). The CIT(A), without appreciating the proper facts, confirmed the additions made by the AO. Therefore, we set aside the order passed by the CIT(A) and direct the A.O. to delete the additions. - Decided in favour of assessee Disallowance of income tax payable - A.O. was of the opinion that income tax is not a allowable deduction under sec. 40(a)(ii) - Held that:- Admittedly, the assessee has estimated the income from construction project on estimation basis. To arrive at the income from the project, the assessee has prepared a P&L account and as per the financial statement prepared by the assessee, the assessee has claimed income tax payable for ₹ 11 lakhs as expenditure in the P&L account. Though profit is estimated, the assessee has claimed income tax payable of ₹ 11 lakhs, as expenditure in the profit & loss account, which cannot be allowed as a deduction u/s 40(a)(ii) of the Act. Therefore, we are of the opinion that the A.O. has rightly made additions of ₹ 11 lakhs towards income tax payable. The CIT(A) has rightly confirmed the additions made by the A.O. We do not see any error or infirmity in the order passed by the CIT(A). - Decided against assessee
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