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2017 (9) TMI 1351 - ITAT KOLKATAClaim of the liquidated damages - in case of delay in delivery the contract intra parties prescribes liquidated damages - assessee is a manufacturer of underground cable and its major customers are State Electricity Boards - Held that:- As brought to the notice of the Ld. CIT(A) that even though the liquidated damages are deducted by the customers, the assessee takes up the matter with the customer for waiver of liquidated damages and whenever the customer agrees and waives the liquidated damages then the assessee credited the same to the P&L Account as has been done in the relevant previous year as well and brought to the notice of the Ld. CIT(A) that ₹ 5,95,864/- out of ₹ 7,68,775/- for ‘provision no longer required written back’ in other income and drew our attention to Schedule 10 page 33 of the Annual Report which relates to the liquidated damages deducted in the earlier years as confirmed by the Note no. 2 of Schedule 10. It was brought to the notice of the Ld. CIT(A) that out of total sum of ₹ 5,48,012/- being the liquidated damages deducted during the year, the biggest deduction of liquidated damages during the relevant year is ₹ 3,70,501/- which was done by Himachal Pradesh State Electricity Board. Taking into consideration all these facts, the Ld. CIT(A) has given relief to the assessee which order we find to be just and reasonable and, therefore, we do not find any reason to interfere with the same. Therefore, we confirm the order of the Ld. CIT(A) and dismiss this ground of appeal of revenue. Addition on suppressed sales - AO has not specifically rejected the books - Held that:- It is well settled that even if it is proved that the suppression of sales has taken place, then also the entire suppressed sales cannot be taxed and only the profit component can be taxed. In any event without finding defects in the books of account maintained by the assessee and without rejecting the books, which is audited, the AO erred in making estimation without giving any credence to the assessee’s explanation why the profit margin decreased, so the action of the Ld. CIT (A) is upheld. Therefore, we do not find any infirmity in the action of the ld. CIT(A) in deleting the addition and we uphold the same Addition u/s 68 - Held that:- The assessee is a company which is having business with the PSUs and big corporate and all the transactions are accounted, audited and through banking channels and just because assessee could not produce the confirmation from the parties, its claim for deduction of ₹ 45,21,363/- as payment towards bill discounting was not accepted by both the authorities below. Since now the assessee is able to get hold of the confirmation from the parties, albeit late the claim if found to be true cannot be disallowed and therefore in the interest of justice, we are inclined to admit the additional evidence filed before us to substantiate the claim. In the interest of justice and fair play we set aside the order of Ld. CIT(A) and remand the matter along with the entire evidence to the AO to adjudicate this issue afresh. Addition being 10% incurred on account of car hire charges, car maintenance and fuel expenses - addition u/s 40A - Held that:- AR before us could not bring any evidence to counter the finding made by the Ld. CIT(A) as to the related party transaction which made him disallow 10% and thereby sustaining ₹ 88,722/-. We do not find any evidence to contradict the finding made by the Ld. CIT(A) which made him sustain the disallowance. In the light of the above, we dismiss this ground of cross objection of the assessee and confirm the Ld. CIT(A)’s order.
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