Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (1) TMI 687 - AT - Income TaxRevision u/s 263 - As per 3CD report, TDS has not been deducted and the same has not been disallowed AND sum has been debited towards advances written off in P & L (Schedule 13, Operating and Other Expenses) but the same has not been considered in the assessment order - according to the CIT, the action of the AO in not disallowing the aforesaid 2 items of expenses for the reason that the first item of the expenditure ought to have been disallowed under section 40(a)(ia) and the second item of expenditure ought to have been disallowed as one not incurred for the purpose of business of the Assessee. HELD THAT:- As far as the first item of disallowance is concerned, assessee could not point out as to why the aforesaid sum cannot be disallowed under section 40(a)(ia) - Form 3CD report clearly mentioned a sum of ₹ 2,24,000/- as the sum on which TDS was not made. The plea of the Assessee that the aforesaid sum is the sum total of all small payments made to different persons and that each of the payment was below the threshold limit of sum on which TDS has to be made as per law, has not been substantiated by the Assessee. In these circumstances, we confirm the order of CIT regarding this addition. - Decided against assessee. Advances written off in P & L - business purposes - There is no material on record to come to such conclusion. The expenditure in question has been incurred for the purpose of business as the same was paid to Mr. Rakesh Rastogi for acquiring properties in Delhi for construction of a SEZ. The assessee is in the business of property development and it cannot be said that the advance given to Mr. Rakesh Rastogi is not for the purposes of business of the assessee. The assessee is the best judge as to whether he should accept forfeiture by Mr. Rakesh Rastogi or take a legal stand for recovery of advance paid to Mr. Rakesh Rastogi. The circumstances pointed out by the CIT cannot be a ground to come to a conclusion that the advances given is not for genuine business purposes - loss on account of forfeiture of advance paid to Mr. Rakesh Rastogi is incidental to the business of the assessee and is allowable as a deduction under section 37(1) or under section 28 of the Act as held in the case of Harshad J. Choksi [2012 (8) TMI 710 - BOMBAY HIGH COURT] - For the reasons stated above, we are of the view that the CIT was in error in adding this sum - Decided in favour of assessee.
|