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2019 (2) TMI 1400 - AT - Income TaxN.P. rate determination - HELD THAT:- N.P ratio is higher in the A.Y. 2014-15 in comparison to A.Y. 2012-13 & 2013-14. As found that the Assessing Officer has not found that purchase and sales recorded in the books are inflated or bogus. Further the Books of accounts are audited u/s 44AB of the income tax act. Without pointing out any defects in the books of accounts the learned A.O’s conclusion to possible leakage of revenue is hypothetical and not tenable. It is very clear that there is increase N.P. rate during the year under consideration as compared to the earlier two years. Under these facts and circumstances of the case, there is no justification for making any trading addition. Accordingly entire trading addition so made by the Assessing Officer is directed to be deleted. Disallowance of foreign travelling of expenditure - HELD THAT:- As found that actual foreign travelling was at ₹ 115,000/- incurred by B.P. Singh on tour to Jeddah on behalf of the assessee. Rest of the expenses ₹ 3,72,881/- were payment to one of the staff Mr. Puneetsingh for inland travelling which inadvertently displayed as a foreign travelling in the income tax return. All expenses were paid to him by cheques as per his submission of bank statement for online payment to IRCTC and Airlines and Hotels. Since the assessee was having export sales to Jeddah and Bahrain, travelling to this country was for the purpose of business. No merit for disallowance foreign travelling expenditure, having been incurred by the assessee for the purpose of this business. Assessing Officer is directed to delete the same. Addition on account of deemed rental income - HELD THAT:- The property purchased by the assessee is situated at Kamla Crystal and not in Kamla Enclave and the same was used for residential purposes by the assessee since its purchase. The house at 6-A-42, C.S. Azad Nagar was occupied for the business of R.K. Textiles for grading and finishing job. The house which is not having any actual rental income but self occupied by assessee should be determined as per the municipal ratable value. Accordingly, the matter is restored to file of the Assessing Officer to find out the municipal ratable value of the house for computing income u/s 22.
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