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2018 (5) TMI 433 - AT - Income TaxDisallowance under the provision of Section 40A(3) - relationship between assessee and SMS Auto - Held that:- On perusal of other supporting evidence such as sale invoice issued by the SMS Auto wherein it was clearly recorded sale through China Automobile suggest that sale was directly made by SMS Auto to the parties. But, it was routed through its agent i.e. China Automobile. Similarly, we also note that the assessee has been registered under the West Bengal VAT under the category of agency business, which also suggest that assessee is acting as agent of SMS Auto. In view of above, we note that the situation of assessee is doubtful whether assessee is an agent of SMS Auto but AO was very much empowered under the provision of law to ascertain the facts that whether assessee is an agent of SMS Auto. But he failed to exercise his power given under the statute. In our considered view the benefit of doubt goes in favour of assessee. In view of the above, we have no hesitation to reverse the orders of Authorities Below. - Decided in favour of assessee.
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