Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (12) TMI 528 - AT - Income TaxNon deduction of tds - addition u/s 40(a)(ia) - Held that:- Now it has been settled that if the recipients have accounted the receipts, which have been disallowed in the hands of the payer on account of non-deduction of tax, and the same has been included in their taxable income, then no disallowance is to be made in the hands of the payer. Considering this aspect, set aside this issue to the file of the Assessing Officer for verification. The assessee shall provide the complete details of recipients and the ld. Assessing Officer shall call for information from the recipients, i.e. ABN Amro, Bajaj Capital and Reliance Capital as to whether they have included this amount in their taxable income or not. If the receipts are accounted in their taxable income, then no disallowance is to be made in the hands of the assessee. This ground of appeal is allowed for statistical purposes. Disallowance of travelling expenses - Held that:- As gone through the record carefully. The assessee has submitted that he took a honeymoon package from PCFL Travel House. According to the assessee, it was only for the namesake “Honeymoon Package”, but he did not go for honeymoon, because his marriage was taken place long back. However, after considering the record, find that the assessee failed to bring any evidence on record demonstrating that the expenditure was incurred wholly and exclusively for the purpose of business. Learned CIT(A) has rightly confirmed the disallowance Low household withdrawal shown by the assessee - Held that:- No error in the order of the ld. CIT(A). A person who can afford a foreign trip for honeymoon, it is highly improbable that his household expenditure should be only ₹ 5,000/- per month in AY 2011-12. Considering the status and nature of business carried out by the assessee, the estimation of the household expenses at the end of the assessee is quite on the lower side. Therefore, this ground of appeal of the assessee is rejected. Addition u/s 37 - expenditures incurred through credit cards - Held that:- When these expenditures are considered in the light of other disallowances made by the Assessing Officer, i.e., estimated household expenditure and foreign travel expenditure etc., then it would reveal that instead of making addition under each item, the ld. Assessing Officer ought to have adopted a uniform policy for making an ad-hoc disallowance. He should not have identified each item, i.e. credit card expenditure, household expenditure, etc., because all these expenditures will be taken care of by ad-hoc disallowance of ₹ 6,00,000/- as this disallowance has been worked out at half percentage of the total turnover. Therefore, once estimated ad-hoc addition on account of low household withdrawal has been made and estimated, ad-hoc disallowances out of business expenditure have been made, then this credit card expenditure ought not to be made. Therefore, part addition confirmed, because the assessee could not submit supporting details showing that the expenditures were exclusively incurred for the purpose of business.
|