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2016 (9) TMI 753 - AT - Income TaxAddition u/s.145A - inclusion of unutilized CENVAT credit and other taxes to the closing stock. - assessee submitted that it follows exclusive method of accounting and does not debit the CENVAT and other taxes to the Profit & Loss Account (P&L A/c.) - Held that:- It is an undisputed fact that assessee is following exclusive method of accounting whereby it does not debits the taxes paid to the purchases, consumption of stock and the aforesaid method of accounting of taxes has been consistently followed by the assessee in earlier and succeeding years and is also stated to have been accepted by Revenue. We find that the Hon’ble Apex Court in the case of CIT vs. Indo Nippon Chemicals Co.Ltd. reported at (2003 (1) TMI 8 - SUPREME Court ) has observed that unavailed MODVAT credit cannot be construed as income and there is no liability to pay tax on such unavailed MODVAT credit. Decided in favour of assessee Disallowance of sales commission - assessee has failed to prove the nature of services rendered by the respective parties to the assessee - Held that:- Even before us, assessee has not placed any material on record by which it could be demonstrated the nature of services rendered by those parties to the assessee. However, as far as payment of sales commission to Devkalpi Dyes & Intermediates is concerned, we find from the chart of commission that has been placed by assessee in the paper-book that assessee had paid ₹ 47,775/- in AY 2008-09, ₹ 78,975/- in AY 2009- 10 and ₹ 1,14,338/- in AY 2010-11. The commission payments to this party has not been disallowed while framing the assessment u/s.143(3) of the Act; meaning thereby that the nature of services, as far as this party is concerned, is not doubted by the Revenue in subsequent years. Before us, Revenue has also not placed any material on record to demonstrate that no services were rendered by it to the assessee. In view of the aforesaid facts, out of the total disallowance of ₹ 7,15,111/-, we direct the deletion of ₹ 47,302/- being the amount of commission paid to Devkalpi Dyes & Intermediates and uphold the balance addition(s) of commission made to other parties. - Decided partly in favour of assessee
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