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2019 (5) TMI 11 - AT - Income TaxAddition on receipts at Cash basis and Sundry Creditors - mercantile system of accounting or Cash system of Accounting - disallowance of accounting charges claimed in Profit & Loss account - disallowance of donation - Addition on account of under recording of contract payment - difference in Form No. 26AS - CIT-A deleted the additions respectively - HELD THAT:- CIT(A) has discussed all issues in detail as noted above and we find no infirmity in the order of the Ld. CIT(A). The assessee has produced credible evidence before the Ld. CIT(A) that he had maintained regular books of accounts on mercantile basis for the accounting purpose, as is clear from the tax audit report submitted before CIT(A) which could not be controverted by the Ld. DR. From the above finding it is also clear that assessee has recorded the expenses / revenue on mercantile basis therefore the AO is not justified to make additions regarding creditors for expenses - the payment to accountant has been explained by the assessee before the Ld. CIT(A) that it is in the nature of salary and therefore, the payment is under the limit for deducting TDS on the salary. In respect of donation also, the ld. CIT(A) has rightly sustained the disallowance of donation to the extent of ₹ 5000/- out of ₹ 8,000/- for want of evidence. We, therefore, find no infirmity in the impugned order on this score. Addition on account of difference in Form No. 26AS - assessee has rightly explained by the ld. CIT(A) and ₹ 15,450 was a service tax on account of supply of labour to M/s. Dyna Aircon Pvt. Ltd. which has been separately accounted for. Therefore, we do not find any justification to interfere with the order of ld. CIT(A) on this issue. - Decided against revenue.
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