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2017 (9) TMI 1102 - AT - Income TaxAddition on account of unconfirmed credit balance - Held that:- In the remand report the AO confirmed that the assessee vide its reply dated 30.12.2011 contended that the corresponding journal entry was passed in the books of account of the assessee on 01.04.2009 by debiting M/s Anil Agency and crediting M/s Shree Uma Electricals. The ld CIT(A) concluded that the journal entry was passed on 01.04.2009 in the books of the assessee debiting M/s Anil Agency and crediting M/s Uma Electricals cannot explain the transaction for AY 2009-10. We have seen that the observation of ld CIT(A) is unfounded. The assessee has properly explained the reconciliation. Moreover, there is no revenue effect in such inter- group transaction. The AO has not brought any material if there would be any loss of revenue in transfer of such entry. Considering the fact that the assessee has duly reconciled the entry which has been admitted the by AO in its remand report dated 23.10.2013, this ground of appeal is allowed. Addition of unconfirmed loan - Held that:- We have seen that in the remand report the AO submitted that the difference was rightly added as the documents were not on record during the assessment proceedings. From the contents of the remand report it is clear that the evidence related with journal entry in the books of account of M/s Uma Electricals was filed only at the stage of remand report. The only objection of the AO was that the journal entry in the books of account of M/s Uma Electricals was not filed during the assessment proceedings. Considering the fact that the assessee has properly reconciled the transfer entry and there is no revenue effect in either of the concern. Moreover, the AO has not brought on record any adverse material on record against the assessee this ground of appeal is allowed. Disallowance of depreciation on Truck - AO disallowed the depreciation holding that the Registration Certificate (RC) of the vehicle was issued only on 01.04.2009 and CIT-A holding that unless the vehicle is registered the assessee cannot use it - Held that:- Considering the facts that no evidence with regards to put to use the vehicle was brought on record before the lower authorities, hence, we do not find any illegality or infirmity in the finding of ld CIT(A) qua this ground of appeal. In the result this ground of appeal is dismissed. Disallowance of depreciation on factory shed - assessee has not substantiated with documentary evidence that addition was made in the factory building of the assessee - Held that:- We have seen that the AO has not disputed the ‘work in progress’ (factory shed) in FY 2007-08 claimed by the assessee. The AO further not disputed for put to use the asset during the relevant financial year relevant to the assessment year under consideration. In our view the assessee is entitled for the depreciation as the asset/ factory shed was added in the asset of assessee during the relevant financial year related with the assessment year under consideration. Thus, this ground of appeal is allowed.
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