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2023 (6) TMI 81 - ITAT DELHIAdhoc addition of 20% of mobilization advance u/s 68 r.w.s. 115BBE - CIT(A) deleted the addition observing that details regarding mobilization advances were fully filed before the assessing officer and thus the conclusion of Ld. AO of absence of the evidences was factually incorrect - HELD THAT:- The Bench is of considered opinion that the genuineness, identity and creditworthiness of the parties making mobilization advances was never questioned so no addition could have been made by Ld. AO by invoking provisions of section 68 - there seems to be no justification to make an adhoc disallowance u/s 68 of the Act. Ld. AO was suppose to either accept mobilization advance as a whole on the basis of running account or to a disbelieve the whole. Ad hoc disallowance without pointing out any shortcoming in accounting method or books is not sustainable. On this account alone the ground deserves to be dismissed. AO failed to take into consideration the details of mobilization advances in the form of short term and long term mobilization advances duly matched with the total outstanding mobilization advance - The Bench is not inclined to interfere in the findings of Ld. CIT(A) deleting the addition. Decided in favour of assessee. TDS credit denied - As observed that the claim of assesses was that mobilization advances received during the year on which TDS gets deducted stands offered as income of the same year and stand offered in the form of WIP. CIT(A) has duly taken into consideration the position of mobilization advances received during the year and the fact that when the Ld. AO has given TDS credit in ITNS 150 and therein had disallowed TDS credit to the extent Rs. 2,52,32,908/-. TDS credit cannot be added as income of the assessee as the same leads to double taxation. The cross objection of the assessee claiming TDS of the entire amount 2,52,32,908 /- instead of proportionate credit given by Ld. CIT(A) was not pressed. Disallowance of salary and wages - assessee has violated matching principle of accounting by claiming excess expenditure in proportion to the revenue offered to taxation - CIT-A deleted the addition - HELD THAT:- CIT(A) has rightly concluded that Ld. AO has mistaken in referring to note 23 of the P & L account which only reflected the position of opening materials, purchases and closing materials. The position of WIP is not shown in this note but part of Note 24. The method of valuation of WIP has been consistently followed by the assessee over years and has been accepted in preceding as well as succeeding years. The same is also in accordance with accounting standards. Thus, the disallowance on adhoc basis without any rational has been rightly deleted by Ld. CIT(A) and no interference is called for. The ground is decided against the Revenue.
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