Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (4) TMI 369 - AT - Income TaxDeduction u/s 80IC - assessee, an individual, is engaged in the business of manufacturing plastic packing material through his Proprietorship concern “Creative Plastopack” - HELD THAT:- In the present case, the business of the assessee is manufacturing of plastic packing material. Thus, prima facie, it appears that the assessee is not engaged in the business of warehousing. However, it is the contention of the assessee from the assessment stage itself that in the event the customer does not lift the goods within the permissible time limit, warehousing charges is levied for storage of goods in the warehouse. Thus, it has been contended that the warehousing charge is integrally connected to manufacture and sale of goods. In this context, it is essential to look into the terms of the contract between the assessee and the customers for levy of warehousing charges. No material has been brought before the Departmental Authorities to demonstrate under what circumstances warehousing charge can be levied from the customers. Even, on a specific query from the Bench to furnish any agreement or document providing for levy of warehousing charges, the learned Authorised Representative was unable to furnish them. In our considered opinion, the terms and conditions of levy of warehousing charges would have a crucial bearing on determining whether the warehousing charge is integrally connected to the profits and gains derived from the business. Since, the aforesaid aspect has not been factually verified either due to lack of material or otherwise, we are inclined to restore the issue to the AO for fresh adjudication after due opportunity of being heard to the assessee. Ground raised is allowed for statistical purposes. Ad–hoc disallowance made out of conveyance expenses - Commissioner (Appeals) reduced the disallowance made by the Assessing Officer to 50% - HELD THAT:- On a perusal of the nature of expenditure, we are of the view that considering the turnover shown by the assessee, the expenditure claimed cannot be considered to be either unreasonable or excessive. Further, it is a fact on record that the assessee has produced some evidences to support the claim of expenditure. The Assessing Officer has not found such evidences to be totally unreliable. In such circumstances, a part disallowance of the expenditure claimed purely on ad–hoc basis, in our view, is not sustainable. Accordingly, we delete the disallowance of the expenditure. The assessee would get consequential benefit under section 80IC of the Act. Grounds no.2 and 3 are allowed.
|