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2018 (7) TMI 875 - AT - Income TaxEstimation of 8% on account of alleged bogus purchases - Held that:- We find the same to be quite just and reasonable in the circumstances of the case since the assessee was engaged in construction activities and could not carry out the same without actual consumption of material. Therefore, we find no infirmity in the stand of lower authority in this regard. Moreover, the issue has already been dealt with by this Tribunal in assessee’s appeal wherein the estimation has been found to be reasonable. Ground Numbers 1 & 2 stands dismissed. Disallowance on account of Sales promotion Expenses - Held that:- Assessee has miserably failed to substantiate the expenditure with supporting vouchers / documents and all the expenditure was in cash. The complete onus, in this regard, was on assessee which he has failed to discharge. Therefore, the addition to the extent of 20% of expenditure in question i.e. ₹ 5,98,650/- stand confirmed by us. The same works out to ₹ 1,19,730/-. Addition on account of valuation of closing stock - Held that:- Revenue is unable to controvert the fact that the assessee was consistently following the same method of accounting for valuing the closing stock. Further the difference in the valuation is arising only on account of the fact that Ld. AO has considered Total Saleable Area as against Total Constructed Area taken by assessee while arriving at the valuation. We are of the opinion that the cost is incurred vis-à-vis Total Constructed Area out of which Saleable Area may be less in view of the fact that some land is occupied / given free of cost by the assessee. One more aspect is the fact that any change in valuation of the closing stock would be tax neutral in nature in the sense that the same would impact the opening stock of the subsequent year and would go on reduce the profits of the subsequent year.
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