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2017 (10) TMI 1247 - AT - Income TaxAddition on bogus purchase at the rate of 12.5% of the bogus purchases - assessee submitted that as in the case of bogus purchases above, the purchase to the extent of 12.5% in this case may be allowed and consequent depreciation granted - Held that:- 12.5% disallowance on account of bogus purchases has been done in the earlier part of this order in the trading account on the premises that the sales have not been doubted. However no such presumption can be made in the case of purchase for fixed assets. Assessee having failed to provide any evidence for the purchase of fixed assets cannot be granted 12.5% allowance for fixed assets purchased on adhoc basis. Hence, do not find any infirmity in the orders of the authorities below on this issue. Hence confirm the same. Disallowance of increase in salary of directors - Double taxation - income taxed in the hands of directors - Held that:- No cogent evidence has been brought on record by the authorities below to disallow the Directors remuneration. It is not the case that the remuneration is bogus, it has been solely disallowed as in the opinion of the Revenue authorities there was no justification for such an increase in the salary as they were not convinced that the increase in turnover is only because of efforts of the Director. As find that Revenue authorities in this case are trying to enter into the shoes of the businessman, which is not permissible. Accordingly set aside the orders of the authorities below on this issue and decide the issue in favour of the assessee.
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