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2019 (1) TMI 198 - AT - Income TaxDisallowance u/s 43B - Addition on account of excise duty on closing stock - disallowance triggered based on the observations made by the tax auditor in the tax audit report - Held that - We find that the tax auditor had duly observed that the assessee had not provided for excise duty on closing stock of finished goods meaning thereby no debit to profit and loss account has been made for the same. While it is so it could be concluded that no deduction had been claimed by the assessee towards excise duty on closing stock of finished goods in the Asst Year 1996-97. When there is no claim of deduction there cannot be applicability of provisions of section 43B - Decided in favour of assessee. Disallowance of depreciation - AO had disallowed only 50% of depreciation claimed by the assessee as the assessee could not furnish separate list of assets - Held that - It is not in dispute that the depreciation on assets is allowable on the basis of block of assets with effect from 1.4.1988. Hence for the assessment years under consideration the principle of block of assets would be applicable. It is now well settled that once an asset enters the particular block of assets and depreciation granted thereon for the whole block as such the concerned asset loses its identity - condition of put to use should be tested only in the year of installation or purchase and not thereafter. Hence we hold that the depreciation is allowable on the entire block of assets in the instant case. In any case the basis adopted by the authorities below of disallowing 50% of depreciation claimed is not in accordance with law.- Decided in favour of assessee. Disallowance of miscellaneous expenses - assessee company was declared as a sick industrial company - Held that - We find that the mistake committed in the annual report had been duly pointed out and brought to the notice of the AO in the original assessment proceedings itself vide written submissions dated 26.10.1998 which has been summarily ignored by the AO. We find that the same had been duly appreciated by the CIT-A by holding that the correct printing charges is only Rs. 7.76 lakhs and that the same is not to be considered as abnormally very high. As argued that since the assessee is already declared as a sick industrial company and most of its units are closed the papers containing documents and evidences are dislocated and hence the evidences could not be furnished before the AO. CIT-A had taken due cognizance of the same and had deleted the disallowance of miscellaneous expenses on an estimated basis which requires no interference.- Decided in favour of assessee. Disallowance of legal and professional expenses - Held that - We find that the CIT-A had granted relief to the assessee to the tune of Rs. 21, 84, 986/- for which details in the form of ledger accounts were produced before the AO since it could be deciphered from the same that the same were paid by account payee cheques. But for the remaining sum of Rs. 9, 87, 014/- no evidence whatsoever was furnished by the assessee. Hence the same has been rightly confirmed by the CIT-A which in our considered opinion does not require any interference
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