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2016 (5) TMI 164 - AT - Income TaxAddition u/s 68 - A.O. made additions solely on the ground that the trade creditors are not confirmed the transactions - Held that:- No addition can be made on trade creditors, when purchase has been accepted as genuine. The CIT(A) after considering the relevant details filed by the assessee has rightly deleted the additions made by the Assessing Officer. We do not find any error or infirmity in the order passed by the CIT(A). Hence, we inclined to uphold the order passed by the CIT(A) and reject the ground raised by the revenue. - Decided in favour of assessee Disallowance of cash payments u/s 40A(3) - Held that:- Assessing Officer has no reason to disallow cash payments by invoking the provisions of section 40A(3) of the Act, when he has not doubted the genuineness of the purchases. The assessee has made the cash payment against purchases. The assessee has reported the purchases and the Assessing Officer has accepted such purchases and computed the profit as per the financial statement filed by assessee. Under these circumstances, we are of the opinion that making additions by invoking the provisions of section 40A(3) of the Act amounts to double additions which is not permissible under the law. There exists a business expediency in making the cash payments towards purchase of goods. The assessee was obliged to make the cash payments required by the suppliers. Therefore, no disallowance can be made towards cash payments by invoking the provisions of section 40A(3) of the Act. The CIT(A) rightly deleted the additions. We do not see any error or infirmity in the order passed by the CIT(A). - Decided in favour of assessee
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