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2021 (4) TMI 109 - AT - Income TaxUnexplained cash deposits and un-explained expenditure u/s 68 and 69C - HELD THAT:- We notice that the Revenue is also unable to rebut the clinching fact that the Assessing Officer has not discussed at all the cash balances in the relevant accounting period from 01-04-2011 to 31-03-2012 before making the impugned additions. We therefore deem it appropriate to restore both these issues back to the Assessing Officer for the purpose of finalising afresh reconciliation of the assessee's cash in hand and balances viz-a-viz impugned negative balance as well as investments - These two grounds are taken as accepted for statistical purposes therefore. Disallowance depreciation on motor vehicles - AO and CIT-A disallowed the assessee's claim to the tune of 50% thereby alleging personal usage element of the corresponding assets - HELD THAT:- We find no reason to sustain the impugned reasoning in principle. More so when the assessee has not added any new asset in the corresponding block in the relevant previous year. The fact also remains that personal usage per se of the office vehicles cannot be altogether ruled out. Faced with this situation, we deem it appropriate to restrict the impugned depreciation disallowance to lumpsum amount of ₹ 1.5 lakhs only with a rider that the same shall not be taken as a precedent. The assessee's third substantive grievance is partly accepted in assessee's favour. Disallowance of director's remuneration claim - taking note of her clarification that she was not playing any key role. All this made the Assessing Officer to invoke the Section 40A(2) terming the impugned payment as excessive and unreasonable - HELD THAT:- We are unable to agree with the impugned amount disallowance as well since the said clarification had come on 16-01-2015 whereas we are in A.Y. 2012-13 only. It was made clear to the AO that the said director had transformed the companies fortunes in designing and internal logistics which in turn helped it to secure in bulk corporate orders in regular course of business. We thus are of the opinion that both the lower authorities' have erred in law and on facts in disallowing the impugned director's remuneration claim.The same is directed to be deleted.
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