Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (11) TMI 732 - AT - Income TaxAddition u/s 40(a)(ia) - payment incurred on account of alleged "Commission" - Held that:- To the extent the recipients from the Assessee have so included the sum in their returns of income and filed the same, no disallowance u/s.40(a)(ia) of the Act ought to have been sustained by the CIT(A). The CIT(A) ought to have also directed the AO that in case the recipient parties are not cooperating in providing details, the AO should call for the information u/s. 133(6) or 131 of the Act, for verification of the same. In this regard we also find that the Assessee has furnished all the details of assessment particulars of the recipients of payment from the Assessee. The AO therefore should not have any difficulty in making the required verification. We therefore set aside the order of the CIT(A) to the extent to which he had sustained the order of the AO on the disallowance u/s.40(a)(ia) of the Act and remand the issue to the AO to verify whether the recipients have included the receipts paid by the assessee in their respective returns of income and also paid taxes on the same. To the extent the recipients from the Assessee have so included the sum in their returns of income and filed the same, no disallowance u/s.40(a)(ia) of the Act should be made by the AO. In case the recipient parties are not cooperating in providing details, the AO should be directed to call for the information u/s. 133(6) or 131 of the Act, for verification of the same Estimation of income on account of alleged "sale of rice bran" - Held that:- Taking into consideration the process of husking carried out by the assessee of paddy, the assessee’s nature of activity ought not to have been compared with the rice mill which is a sophisticated mechanised process of operation. As already seen the plant and machinery owned by the assessee was negligible and it was only worth less than ₹ 25,000/-. Therefore the basic assumption on which the impugned addition was made by the revenue authorities cannot be sustained. Besides the above the completeness and correctness of the books of account was also not disputed by the AO and in the circumstances as already laid down by Hon’ble Amritsar Bench in the case of Chattar Extraction (P)Ltd vs ITO (2004 (1) TMI 297 - ITAT AMRITSAR ) no addition could be made on account of rice bran extraction. There is no evidence on record to show either availability of bran or its sale outside the books of accounts. - Decided in favour of assessee Denial of loss suffered on handling charges - Held that:- it is not possible to arrive at the conclusion that there would be no shortage of stock due to damage immature paddy damaged caused by rats etc. The basis on which the AO disallowed the claim of the assessee was that the assessee had sold the entire stock of paddy and there was no possibility of shortage and consequent loss in handling paddy. Such mathematical calculation in my view would not be sufficient to making the impugned disallowance. Since the impugned disallowance is made on assumptions and surmises the same is directed to be deleted. - Decided in favour of assessee
|