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2012 (7) TMI 34 - ITAT, NEW DELHIAdditions made on the ground that since the confirmations from creditors have not been produced except one creditor, creditors balances are being added as income - nottice u/s 133(6) - held that:- For 133(6) compliance assessee had no control over third parties. - once the AO issued summons u/s 133(6), as held by Hon'ble Supreme Court in the case of CIT v. Orissa Corporation (P) Ltd. (1986 (3) TMI 3 (SC)), it is his duty to ensure that the proess of issue of summons is brought to a logical conclusion by enforcing summons. The enforcement can be achieved in many ways including taking action on uncomplied summoned persons, by appointing commission on the income-tax authorities having jurisdiction over them and getting the verification from their returns or accounts. - Decided in favor of assessee It cannot be held that suppliers were not genuine only because summons u/s 133(6) were not served. The I.T. Act does not cast absolute burden on the assessee, sec. 68 cast a preliminary burden, which, in our view, has been duly discharged by the assessee by filing the confirmations, bank statements, invoices and transport details of supplies and goods. - the additions made u/s 68 on account difference in balances or non-receipt of reply to summons etc. cannot be made in the hands of the assessee. Disallowance of technical fee and reimbursement - Assessee orally explained that it was the amount payable on account of consultancy services to Continental Carbon Co. USA – Held that:- assessee received the bills in March 2003 and by general entry entered the liability - There is no dispute about the rendering of service and the last bill drawn by Continental Carbon Co. USA - liability has crystallized in this year and cannot be called as relating to earlier year and is allowable expenditure Disallowance on account of expenses for annual chamber membership fee paid to Taj Mahal Hotels – Held that:- Amount is allowable revenue expenditure as the assessee availed the membership offered by Taj Mahal Hotels which was economical, providing the facility to use the chamber at any time during the year for meetings of clients and officers. It is a business decision for avoiding room rent expenses, the same is allowable - Addition is deleted Depreciation on computer peripherals – Held that:- 60% depreciation is to be allowed on computer peripherals Depreciation on capital stores – Held that:- no infirmity in the order of CIT(A) who has allowed the depreciation on the basis of accounting standard AS-10 - expression used for the purposes of business appearing in section 32 of the Act also takes into account emergency spares which even though ready for use are not as a matter of fact consumed or used during the relevant period, as these are spares specific to a fixed asset and will in all probability be useless once the asset is discarded – revenue appeal is dismissed accordingly. while computing the book profits u/s 115JB, the doubtful debts, obsolete / non moving stores and leave encashment are to be excluded.
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