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2017 (9) TMI 1342 - AT - Income TaxValidity of reopening of assessment - Held that:- We notice that the AO has listed out various points in the reasons for reopening, which show that the assessing officer has prima facie case of escapement of income. As submitted by Ld D.R, the audit objections can be the source of information. Accordingly we are of the view that the Ld CIT(A) was justified in upholding the reopening of assessment. Disallowance made u/s 40(a)(ia) - assessee submitted that the above said payments includes reimbursement of expenses - Held that:- We notice that copy of the letter dated 04-12-2012 addressed to the AO which show that the assessee had explained the nature of every payment. We notice that the tax authorities have made the addition u/s 40(a)(ia) of the Act without considering the reply given by the assessee. In our view, this is not justified. Also the assessee has explained that the payment of ₹ 3.00 lakhs made to M/s Eskay Elevators (India) Ltd is payment for purchase of materials. A perusal of the same would show that it was for supply of materials and the VAT has also been collected at 8%. Hence the same would not attract the provisions of TDS. The payment made to Mr. Ajay Mishra was pertaining to two bills of ₹ 17,000/- each, i.e., each payment did not exceed the limit of ₹ 20,000/- and the aggregate payment did not exceed ₹ 50,000/-. Hence these payments would also not attract TDS provisions. Accordingly we direct the AO to delete both these additions. The order passed by Ld CIT(A) on these two payments stands set aside. Disallowance of purchases - Held that:- We notice that the assessee has furnished full details of miscellaneous purchases and the tax authorities have made the addition without examining the same. Hence we are of the view that this addition has been made on surmises and conjectures. Accordingly we are of the view that this addition needs to be deleted in entirety. Accordingly we set aside the order passed by Ld CIT(A) and direct the AO to delete the entire amount of addition relating to miscellaneous purchases. Addition of sunder creditors - Wrong entry on purchases - Held that:- In its letter dated 31-12-2012, the assessee has explained that the purchases of ₹ 3,26,019/- was made from M/s Newspark Trading Co. P Ltd and it was wrongly credited to the account of M/s Parasprabhu Grani Marmo P Ltd. It was further submitted that the said mistake was rectified in the succeeding year. The assessee also furnished ledger account copies of the succeeding years to substantiate its contentions. The Ld A.R invited our attention to the copy of letter dated 31.12.2012 and also the copies of ledger accounts. Since it was a case of accounting error, we are of the view that the addition of ₹ 3,26,019/- is not called for. Accordingly we are of the view that the Ld CIT(A) was justified in deleting this addition. Addition pertaining to unaccounted sale of flats - Held that:- We notice that there is no question of unaccounted sales as the difference pointed out by the AO refers to the difference between the “Agreement for sale” and the amount shown as actually received. We notice that the assessee has been receiving agreed amount in installments. As rightly pointed out by Ld CIT(A), the income shall accrue in accordance with the method of accounting followed by the assessee and the same would not accrue upon entering “agreement for sale”. Accordingly we are of the view that the decision rendered by Ld CIT(A) on this issue does not call for any interference.
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