Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (4) TMI 380 - AT - Income TaxAd-hoc disallowance at the rate of 10% on credit card expenses - assessee has contended that the alleged additions made by ld. AO are merely on suspicion and no defect has been pointed out in the details of the expenditure given by the assessee - HELD THAT:- In the assessment order framed u/s 153A r.w.s. 143(3) of the Act ld. AO made only two disallowances; firstly towards personal expenses included in the credit card expenses and secondly the disallowance at the rate of 10% of the foreign travel expenses. Prima Facie the said disallowance is ad-hoc in nature. AO ought to have made reference to any of such expenses given in the books which could indicate that they are personal in nature. Merely making disallowance just for the sake of concluding the assessment is not a justified approach. Expenses through credit card have been claimed as general business expenditure in order to attend the business meetings. No specific defect has been pointed out by the Revenue authorities and as claimed by ld. Counsel for the assessee that in the subsequent years no such disallowance has been made in the scrutiny proceedings carried out As alleged disallowance is based on merely conjectures, surmises and suspicion and the same deserves to be deleted. Thus, the addition for ad-hoc disallowance made is deleted. Decided in favour of assessee. Ad-hoc disallowance at the rate of 10% on foreign travel expenses - HELD THAT:- Taking a consistent view and observing that the alleged disallowance for foreign travel expenses is merely ad-hoc in nature, we delete the said disallowance. Disallowance of brokerage - HELD THAT:- The brokerage bill was received, accounted for and settled during the year under appeal. Tax at source has been deducted thereof. The genuineness of the brokerage expenses has not been doubted by the Revenue authorities. This being a genuine claim of business expenditure towards brokerage, the same deserves to be allowed. We, thus, set aside the finding of ld. CIT(A) and delete the said disallowance - Decided in favour of assessee. Nature of receipt - sales tax incentives - whether the sales tax incentive is a capital receipt and is to be excluded for the purpose of computing book profit u/s 115JB? -HELD THAT:- The sales tax incentive received by the assessee is for setting up of industries in the backward areas of West Bengal and is not directly related to the revenue growth of the assessee company, we hold it to be a capital receipt not liable to tax. See M/S. BIRLA CORPORATION LTD [2021 (1) TMI 154 - ITAT KOLKATA], M/S. SOVAISPAT LIMITED [2020 (6) TMI 100 - ITAT KOLKATA], CHAPHALKAR BROTHERS PUNE [2017 (12) TMI 816 - SUPREME COURT] , RELIANCE INDUSTRIES LTD. [2009 (4) TMI 516 - BOMBAY HIGH COURT] MAT Computation - exclusion of the sales tax incentive for the purpose of computing book profit u/s 115JB - HELD THAT:- The sales tax incentive which is the capital receipt (as held above in the preceding para) given to the assessee for achieving industrialization in the backward areas of West Bengal, is not required to be included in the book profit for computing the tax liability u/s 115JB of the Act - See SICPA INDIA PRIVATE LIMITED (FORMERLY KNOWN AS SICPA INDIA LTD.) VERSUS D.C.I.T., CIRCLE-8, KOLKATA [2017 (3) TMI 1383 - ITAT KOLKATA]
|