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2015 (3) TMI 6 - ITAT KOLKATAAddition of undisclosed working capital - CIT (A) restricted the addition at 8,91,445/- as against ₹ 14,76,464/- made by AO - Held that:- CIT(A) has only telescoped this income against income from undisclosed portion of business and according to him, the undisclosed business income will be ₹ 10,49,059/- as the books of account had already been rejected and estimation has been made by the AO. We find no infirmity in the direction of CIT(A) telescoping this income against the business income. - Decided against revenue. Unexplained investment in RIP - CIT(A) deleted the addition - Held that:- No infirmity in the findings of CIT(A) as he is telescoped the investment in RIPs at ₹ 1,39,941/- against left out unadjusted profit from business at ₹ 1,57,614/-. Hence, we confirm the order of CIT(A) on this issue - Decided against revenue. Non existent trade creditors - addition to income - Held that:- Trade creditors/sundry creditors exist in the Balance Sheet of the assessee and there is no write off made by the assessee or no claim made by the assessee. Once this is the position, this cannot be added because liability still exists. In such circumstances, we delete the addition. - Decided in favour of assessee. Disallowance under section 40A(3) - Held that:- We find that the AO has rejected the books of account and estimated the profit and these purchases are included in the estimated sales of ₹ 1,57,84,783 /-. Once the books of account are rejected and profit is estimated on the disputed turnover/purchases, no further disallowance can be made by invoking the provisions of section 40A(3) of the Act - Decided in favour of assessee.
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