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2017 (12) TMI 1531 - GUJARAT HIGH COURTADMIT question [A] “Whether the Income Tax Appellate Tribunal was justified in law and on facts in deleting the disallowance of ₹ 30,27,85,170/- made on account of loss claimed due to cancellation of forward contract?” Disallowance of unexplained capital introduced by the partners - Held that:- In the opinion of this court, when the unexplained capital had been introduced by the partners, such unexplained addition could only be made in the hands of the partner. Therefore, no infirmity can be found in the view adopted by the Tribunal so as to give rise to a question of law. Disallowance on account of foreign travel expenses - AO had disallowed travel expenses only on the ground that Sapin Shah and Priyanka Shah were not partners of the firm - Tribunal has observed that it was true that Mr. Sapin Shah and Ms. Priyanka Shah were not partners of the assessee firm, but it was also true that they were employees of the firm who had travelled abroad for the purposes of the business of the assessee - Held that:- The Tribunal correctly noted that the assessee had filed details of sales made at Hong Kong and Dubai in respect of its foreign travel expenditure and was of the view that merely because the two persons who went abroad were not partners of the assessee firm, would not justify the disallowance. In the opinion of this court, having regard to the findings of fact recorded by it, no infirmity can be found in the reasoning adopted by the Tribunal. Disallowance u/s 40(a)(ia) - Tribunal held that the Commissioner (Appeals) had rightly deleted the disallowance after reconciling the tax deducted at source amount with the quantum on which the tax had been deducted at source. Since the conclusion arrived at by the Tribunal is based upon a finding of fact, the same does not give rise to any question of law. Disallowance on account of labour charges - AO disallowed on the ground that in spite of fall in the turnover, the labour charges were found to be higher than the previous year and made disallowance of 5% of the total labour charges claimed by the assessee - Held that:- The Tribunal correctly found that the assessee had deducted labour charges of ₹ 23.22 crore during the year under consideration as compared to ₹ 22.75 crore incurred in the immediately preceding year and further found that the rise in the labour expenses is only to the tune of ₹ 47 lakh which was higher by 2% from the expenses incurred in the immediately preceding assessment year and was of the opinion that this by itself could not be a reason for making the disallowance and confirmed the deletion made by the Commissioner (Appeals). Having the Assessing Officer has made the disallowance only on the basis of presumption, no question of law can be said to arise in respect of this issue.
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