Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (11) TMI 144 - AT - Income TaxCurrent liabilities – Documentary evidences reconciled or not - Expenses incurred in the nature of reimbursement of expenses or not - Whether the CIT (A) erred in deleting the additions made by the AO not appreciating the fact that the assessee could not reconcile and explain with necessary documentary evidences the differences found in amounts claimed by the assessee under the head “Current liabilities’ w.r.t. amounts payable to alchemist group of companies and information as obtained from Alchemist Group of Companies u/s 133 (6) – Held that:- The assessee filed all details and documentary evidence in the shape of bills/vouchers along with complete books of account - the AO has himself stated in the assessment order that the details filed by the assessee were examined by her - All the three companies of the Alchemist Group duly furnished confirmations dated 26.12.2011 before the Assessing Officer on query u/s 133 (6) of the Act - However, the AO observed that since the assessee had failed to furnish documentary evidence in support of his stand regarding the expenses made on behalf of the Alchemist group, such stand was not acceptable and that the accounts of all the three companies of the Alchemist Group for the relevant period remained unreconciled. The AO erroneously did not go through these details - The assessment order does not contain any reference to any of these documents filed by the assessee, though the AO observed that these were examined - Had these details been examined, obviously, it could not have been observed in the assessment order that there was absence of documentary/supportive evidence with regard to the stand of the assessee that he had incurred the expenses on behalf of Alchemist Group out of the amounts received by him from them - the assessee’s bank account with HDFC Bank showing the payments received by the assessee from the Alchemist Group, the copy of ledger account of business promotion and entertainment expenses in the books of the assessee, balance sheets and Profit & Loss Account of all the three Companies of the Alchemist Group for F.Ys. 2006-07, 2007-08 and 2008-09 and the Schedules of loans and advances in the books of all the three companies of the Alchemist Group, for all the three years were before the AO - None of the documents finds even as much as a mention in the assessment order - the assessee not having claimed any expenses, rightly contended, no disallowance is possible – the order of the CIT(A) is upheld – Decided against revenue. Adhoc disallowance - Business promotion, staff welfare and entertainment expenses – Documentary evidences provided or not – Held that:- CIT(A) rightly acknowledges the fact of production of books of account and examination thereof by the AO - The books of account are undisputedly audited - No defect therein was found by the Assessing Officer - It was not alleged that any expenditure, which was not capable of being checked and verified, was incurred by the assessee - Only an ad hoc disallowance was made, without giving reasons for the amount being disallowed – the order of the CIT(A) is upheld – Decided against revenue.
|