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2018 (1) TMI 1188 - AT - Income TaxAdding the outstanding balance of creditor to the total income - Held that:- The assessee’s payment for whatever reasons got struck overseas for services rendered to Oil & Gas industry and in order to protect its interest and in consistent with MOU with its agent, it withheld the corresponding payment of commission payable to its agent as it has not realised its payments from customers whose business this agent Badar Al Safran generated as claimed by the assessee. It was incumbent on the learned AO as well learned CIT(A) to have gone into greater scrutiny and examination to disprove the contentions of the assessee and merely making bald statement is not sufficient. Assessee has also produced details of court cases at Kuwait and correspondences with its overseas buyers/agents w.r.t. its efforts for making recovery etc to justify that these payments are still due from the customers albeit the same was produced before the tribunal for the first time. Revenue has not brought on record any incriminating material to support its stand despite having sufficient opportunity to had made necessary enquiries and verification at level of AO as well learned CIT(A) whose powers are coterminous with that of the AO which unfortunately the Revenue did not do so while the assessee placed all the facts before the authorities below. We do not find any justification in sustaining/confirming additions made by the AO/CIT(A) under the factual matrix of the case which we hereby ordered to be deleted. Addition u/s 14A - Held that:- There is no evidence on record that the assessee has not received any exempt dividend income during relevant previous year as also the taxability of dividend income receivable from foreign company namely Pyramid Engineering & Consulting Limited , UK in which assessee has claimed to have invested is also required to be gone through as these aspects are not been gone through by the authorities below. It is settled principle of law that tax can only be levied by or under the authority of law which is also the mandate of the Constitution of India under Article 365. Merely acquiescence to pay tax on the income which is not subjected to tax under the provisions of law will not make that income chargeable to tax which is certainly not the mandate of law. Thus, this matter need to be set aside and restored to the file of the AO for de-novo determination of the issue on merits in accordance with the law.
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