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2021 (10) TMI 905 - AT - Income TaxDisallowance u/s 40(a)(ia) - Scope of “2nd proviso” to Sec. 40(a)(ia) - amount paid by the assessee company towards transportation charges to Reliance Gas Transportation Infrastructure Ltd. (RGTIL) - HELD THAT:- Now when the deductee/payee i.e RGTIL had duly considered the transportation charges of ₹ 82.65 crores as part of its turnover for the year under consideration, and had duly considered/offered the said amount for tax while compiling its return of income for the year under consideration i.e A.Y. 2010-11, therefore, it could not be held to be an assessee in default qua the said amount. Accordingly, finding no infirmity in the view taken by the CIT(A) who had rightly vacated the disallowance u/s 40(a)(ia) made by the A.O, we uphold his order to the said extent. The Grounds of appeal Nos. 1.1 & 1.2 are dismissed. Addition of prior period expenditure - HELD THAT:- In the backdrop of the aforesaid facts, we find that no infirmity arises from the order of the CIT(A), who in our considered view had rightly directed the A.O to restrict the disallowance of the prior period expenditure to an amount of ₹ 11.97 crores. Accordingly, finding no infirmity in the view taken by the CIT(A) qua the aforesaid issue in question, we uphold his order to the said extent. The Ground of appeal No. 2 is dismissed. Disallowance u/s 14A r.w Rule 8D - claim of the ld. A.R that as the assessee during the year under consideration had not received any exempt income, therefore, no disallowance u/s 14A was called for in its hands - HELD THAT:- As is discernible from the order of the CIT(A), it is a matter of fact borne from the record that the assessee company had not received any exempt income during the year under consideration. Backed by the aforesaid facts, we concur with the claim of the ld. A.R that now when the assessee had not received any exempt income during the year under consideration, therefore, no disallowance u/s 14A could have been made in its hands - No infirmity with the view taken by the CIT(A) who had rightly vacated the disallowance - Decided in favour of assessee. Bogus purchases -CIT-A deleted the addition - HELD THAT:- We find that the assessee in the course of the proceedings before the CIT(A) had duly substantiated the genuineness and veracity of the purchases that were claimed to have been made from one of the supplier party, viz. M/s Forum Traders. As the assessee had submitted the purchase bills, documents relating to the transportation and receipt of goods, copy of the bank statements evidencing the payments made to the aforementioned party, therefore, we find no infirmity in the view taken by the CIT(A), who had rightly held that the assessee had made genuine purchases from the aforementioned party. Neither is anything discernible from the records nor has been placed on our record which would point out any perversity in the aforesaid view so taken by the CIT(A). CIT(A) had rightly observed that the assessee had made genuine purchases from M/s Forum Traders. Accordingly, finding no infirmity in the view taken by the CIT(A) we uphold his order to the said extent. The Ground of appeal No. 4 is dismissed.
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