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2022 (9) TMI 473 - Income Tax
Addition of accrued interest on delayed Payment - “accrued interest not recoverable” - assessee was following the mercantile system of accounting and the assessee did not actually written off or reversed the interest credit entry in its accounts - CIT-A deleted the addition - HELD THAT:- We find that CIT(A) after considering the submissions of the assessee has given a finding that the aforesaid amount was not taxable in the year under consideration in view of real income theory. Before us, AR has also placed on record the copy of the computation of income for the A.Y. 2016-17 demonstrating that the aforesaid amount has been offered to tax in the year under consideration. In absence of any fallacy pointed by the Revenue in the findings of the Ld. CIT(A), we find no reason to interfere with the order of the CIT(A) on this ground. We, therefore, dismiss grounds of appeal nos.1 and 2 of the Revenue.
Addition u/s 68 - Unexplained cash deposits - HELD THAT:- We find that before both the authorities the assessee had explained the source of cash deposits in the bank account of Mr. Pawan Goyal, from whom the assessee had received the share application money, to be out of the income surrendered on account of unaccounted sale during the course of search. Before us, the Revenue has not placed any material on record to demonstrate that the income surrendered in the case of share application money has not been accepted by the Revenue. In absence of any fallacy pointed to in the findings of the CIT(A), we find no reason to interfere with the order of CIT(A) and thus, ground of appeal of the Revenue is dismissed.
Addition on account of ‘business promotion expenses’ and on account of ‘Diwali expenses’ - HELD THAT:- We find that CIT(A) after considering the detailed submissions made by the assessee before him has given a finding that there is no doubt about the genuineness of the expenditure and there is no finding in the assessment order that the business promotion expenses and Diwali expenses were incurred for the personal purpose / extraneous nature of expenses in the hands of Directors. CIT(A) after considering that since the assessee could not give the full details, restricted the disallowance to the extent of 10% on business promotion expenses after considering the business and turnover of the assessee and similarly granted partial relief on account of ‘Diwali expenses’ against a sum claimed by the assessee on account of ‘Diwali expenses’. Before us, the Revenue has not pointed out any fallacy in the finding of the CIT(A). We, therefore, find no reason to interfere with the order of the Ld. CIT(A) and thus, the grounds of appeal of Revenue are dismissed.