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 1252 - AT - Income TaxAddition on account of disallowance of expenses - CIT(A) deleted the disallowance - Held that:- Assessee during the course of assessment proceedings has filed various details including ledger account of the expenses a finding given by CIT(A) and not controverted by DR. AO never raised any further query to examine the genuineness of the expenses. No specific remark in respect of any defect or shortcomings in maintaining of details has been made by the Assessing Officer. Since the accounts of the assessee are audited under the companies Act, 1956 and u/s 44 AB of the Income Tax Act, 1961, therefore, in absence of any defect brought on record by the Assessing Officer, the disallowance made by him by estimating the disallowance of expenditure of 50% of such expenses is uncalled for - decided against revenue. Deemed dividend addition u/s 2(22)(e) - Held that:- No infirmity in the order of the CIT(A) deleting the addition from the hands of the assessee and directing the Assessing Officer to make the addition in the hands of the share holders by following the decision of CIT Vs. Ankitech Private Limited (2011 (5) TMI 325 - DELHI HIGH COURT) which has been upheld by Hon’ble Supreme Court in the case of CIT Vs. Madhur Housing Development Company [2017 (10) TMI 1279 - SUPREME COURT OF INDIA] - decided against revenue. Addition on account of inflated purchases - Held that:- The entire addition by disallowing of 40% of the purchases in our opinion is not justified when the books of account are not rejected. We find the Hon’ble Gujarat High Court in the case of Yunus Haji Fazawala Vs. CIT [2016 (2) TMI 1204 - GUJARAT HIGH COURT] has held that action of the Assessing Officer in disallowing 25% of purchases by doubting its genuiness without rejecting the books of account cannot be sustained. The order of the Tribunal confirming the disallowance was accordingly reversed. Since in the instant case also the books of account are not rejected, therefore, action of the CIT(A) in deleting such addition is justified. Further we find merit in the findings of the CIT (A) that if the action of the Assessing Officer is accepted then profit of the assessee will be 32.9 % for A. Y. 2013-14 and 56.09% for A.Y. 2014-15 which is illogical and absurd. Order of the CIT(A) on this issue is just and proper. Protective addition on account of cash and seized - assessee submitted that since the substantive additions has already been made in the hands of Mr. Moin Akhtar Qureshi - Held that:- No infirmity in the order of the CIT(A) deleting the addition made Assessing Officer. We find while deleting the same the ld. CIT(A) has given the finding that substantive addition has already been made in the hands Mr. Moin Akhtar Qureshi as mentioned by the Assessing Officer himself. Since he has deleted the addition with certain directions, therefore, the same being in order we do not find any infirmity in the same. Accordingly, the ground raised by the revenue is dismissed. Addition based on documents found and seized during the search proceedings - bogus purchases - Held that:- When the assessee was making regular transaction with M/s. Jajit Industries, and making purchases from M/s. Hari Mohan Enterprises, M/s. Bajrang Traders and M/s Gurunanak Traders. The Assessing Officer should have called for details from the said parties and should have verified the transactions, if any, over and above the figures mentioned in the seized documents. In our opinion the Assessing Officer cannot estimate the unaccounted purchase and sale for assessment year 2013- 14 based on the material found in the search proceedings relating to AY 2014-15 - restore the issue to the file of the Assessing Officer with a direction to obtain information from the parties regarding transactions carried on by the assessee during the above 2 years.
|