Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (12) TMI 577 - AT - Income TaxDisallowance of 10% of the “miscellaneous expenses” - Held that:- Assessee had not maintained any log book/record in respect of telephone expenses, vehicle expenses and hotel expenses, as a result whereof the factum of the said expenses having been incurred wholly and exclusively for the purpose of the business of the assessee cannot be established beyond any scope of doubt. CIT(A) in order to meet the ends of justice has adopted a liberal approach and restricted the disallowance to 10% of the total expenses booked under the said head of expenditure. No infirmity does emerge from the sustaining of the disallowance of 10% of the total miscellaneous expenses by the CIT(A). No reason to dislodge the sustaining of the disallowance of 10% of the miscellaneous expenses by the CIT(A), uphold his order to the said extent. The Ground of appeal No. 1 raised by the assessee is dismissed. Disallowance of 25% of the travelling expenses - Held that:- Assessee had failed to conclusively establish the incurring of the travelling expenses and its nexus with its business, thus are of the view that the lower authorities were fairly justified in disallowing a part of the said expenses. However, at the same time, we are unable to persuade ourselves to endorse the disallowance of 25% of the said expenses which as per our considered view is highly exorbitant in the backdrop of the scale of the business of the assessee. There is substantial force in the contention of the A.R that keeping in view the substantial turnover of more than ₹ 610 crores of the assessee company for the year under consideration, incurring of travelling expense to the extent of ₹ 15,08,143/- can safely be held to be a miniscule amount. We the nature of business of the assessee company, therein restrict the disallowance of the travelling expense to the extent of 10% of the total amount of such expenses. Disallowance u/s 36(1)(ii) - Held that:- A matter of fact that no such payment was made to the said director in the earlier years. We have given a thoughtful consideration to the contentions raised by the A.R in support of its claim that the remuneration of ₹ 36 lac paid by the assessee company to Mr. Mohit Kamboj, director for the services rendered by him was not liable to be disallowed under Sec.36(1)(ii), but are unable to persuade ourselves to accept the same. We have perused the observations of the CIT(A) and find ourselves to be in agreement with the well reasoned view taken by him that the amount of ₹ 36 lac paid by the assessee company to Mr. Mohit Kamboj, director was rightly disallowed by the A.O under Sec. 36(1)(ii). We thus finding no infirmity in the order of the CIT(A) in context of the issue under consideration uphold his order to the said extent. The Ground of appeal No. 3 raised by the assessee is dismissed. Unexplained cash credit u/s 68 - Held that:- The adverse inferences which have been drawn by the lower authorities on the ground that the said concerns had made substantial payments of amounts to Mr. Mohit Kamboj, in our considered view the same as observed by us hereinabove, being independent transactions will have no bearing on the adjudication of the genuineness of the purchases claimed by the assessee to have been made from the said respective parties. Apart therefrom, in the absence of any irrefutable evidence which would prove to the hilt the in-genuineness of the “labour charges” of ₹ 9,15,684/- claimed by the assessee to have been paid to M/s Arham Jewellery, which had duly reflected a “labour income” of ₹ 30,35,701/- in its profit & loss account for the year under consideration i.e A.Y 2012-13, the adverse inferences drawn by the A.O as regards the veracity of such expenditure is also liable to be vacated. In terms of our aforesaid observations finding no reason to sustain the unsubstantiated estimation of gross profit rate of 2% by the CIT(A), leading to a consequential addition in the hands of the assessee, delete the same. Bogus purchases - Held that:- As deliberated at length on the sustaining of the addition by the CIT(A) to the extent of ₹ 1,71,73,863/- in context of the purchases made by the assessee from the aforementioned three concerns viz. (i) M/s Arham Jewellery; (ii) M/s Dev Jewells; and (iii) M/s Rajeshwari Impex and have deleted the disallowance of ₹ 1,71,73,863/- for the reason that the purchases claimed by the assessee to have been made from the aforementioned concerns cannot be disallowed by alleging the same as bogus in the absence of irrefutable documentary evidence. Thus, in terms of our observations recorded the ground of appeal No. 1 raised by the revenue in respect of the bogus purchases fails. The Ground of appeal No. 1 raised by the revenue is dismissed.
|