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 612 - AT - Income TaxAddition u/s 41(1) - cessation of liability - sundry creditors towards whom the assessee had not repaid - HELD THAT:- In the present case it is not in dispute that the impugned amount was the credit balance in the name of the Ex partner Ms. Shivani Singal who did not withdraw the same at the time of her retirement. This amount was shown in the balance sheet of the assessee as payable to Ms. Shivani which Forming Part of the Balance Sheet as at 31/03/2015 wherein this amount has been shown under current liability as loan from Ex partner, under the same head amount shown as on 31/03/2014 which shows that there was decrease in the amount during the year under consideration. It cannot be said that there was a cessation of liability u/s 41(1) - CIT(A) was fully justified in deleting the addition made by the A.O. by observing that the liability under consideration was not a trading liability rather it was the balance of the capital contributed by the Ex partner. Addition u/s 14A - HELD THAT:- It is the duty of the revenue to establish nexus of the funds that assessee has used the interest bearing funds for the purposes of earning exempt income to make any disallowance u/s 14A with respect to interest expenditure. As the ld AO has not established the nexus about investment of interest bearing funds in exempt income generating apparatus, no disallowance u/s 14A rwr 8D can be made on account of interest expenses. - Decided in favour of assessee. Addition on account of various expenses - assessee did not stated the nature of expenditure alongwith the justification and the details of the various expenses relating to building material ion for genuineness of its claim - HELD THAT:- Assessee furnished the details of the expenses asked by the A.O. and the details of the various expenses relating to building material - A.O. was not justified in stating that the assessee had not furnished any reply. On the other hand the CIT(A) after examining the details/material on record, came to the conclusion that the assessee had placed copy of account of building repair alongwith copy of major bills before the A.O. vide letter dt. 24/10/2017 and considering the quantum of repair this amount was very small. - Decided against revenue. Loss on Retiring Assets - Addition treating the loss as inadmissible loss - CIT(A) deleted the addition subsequent to verification of the A.O. for the reason that the assessee suomotu had made the disallowance in its computation of income - HELD THAT:- No merit in this ground of the Departmental appeal particularly when the assessee itself added the loss on retiring asset to its income in the computation of total income. - Decided against revenue.
|