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2017 (4) TMI 912 - AT - Income TaxAddition of rental income - difference in TDS amount and corresponding income shown in Form 26AS - Held that:- None of the departmental authorities have taken care to properly verify the reconciliation statement submitted by the assessee with reference to Form 26AS as well as the ledger account copies and the return of income filed for the previous assessment years, wherein the assessee claimed to have declared the income corresponding to excess TDS amount. On the basis of documents submitted before us, it has been demonstrated by the assessee that the excess TDS in the impugned assessment year is on account of non-deduction of TDS on service tax as well as amenities amount paid to the assessee in the earlier assessment years. Thus, from the aforesaid material placed on record, we are satisfied that in reality there is no difference in rental income claimed to have been received by the assessee as per the return of income and as attempted to be made out by the department on the basis of the TDS amount shown in Form 26AS. Accordingly, we delete the addition - Decided in favour of assessee. Disallowonce of business expenditure - assessee had not carried out any manufacturing and business activity and is only effecting sales for stock clearance - Held that:- AO has not denied the fact that the assessee is carrying on its trading activity by disposing of the stock available with it. If that is the case, certainly the assessee requires infrastructure/establishment to carry on its business activity even if it relates to disposing of the stock available with it. For carrying on such activity also assessee has to employ person by incurring salary cost, rent payment and many other ancillary and incidental expenditures like electricity, conveyance etc. Similarly, there can be no dispute that bad debts are in course of its regular business activity. Once it is held so, there is no need for the assessee to demonstrate that it has failed in its attempt to recover the debt from the parties. The only requirement being, the assessee has to write off the debt in its books of account. As far as interest expenditure is concerned, when there is no dispute that the assessee is maintaining its establishment to carry on its trading activity it requires capital to run such activity as it has to incur day to day expenditure as well as other regular business expenditure. It is evident the AO has not raised any doubt with regard to the genuineness of the expenditure apart from making general observations. Thus we agree with the CIT(A) that expenditure claimed by the assessee is allowable - Decided in favour of assessee.
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