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2023 (12) TMI 882 - ITAT DELHIAddition u/s 41 - liability outstanding or not? - HELD THAT:- Under the schedule trade payables there is no liability outstanding under the name of Axom Communications - We have carefully gone through the entire financial statements and we could not find any mention of any liability in the name of Axom Communication where from the AO has picked up this figure is not known since it is not part of the financial statement. We do not find any logic / reason for making the impugned addition. For the liability in the name of Web Com India Private Limited the bills are placed and the liability pertains to the year under consideration only. For the reasons given here in above, we do not find any merit in this addition u/s.41 of the Act. Thus the addition is deleted.Decided in favour of assesee. Disallowance u/s.40a(ia) - non deposit of tax deducted at source - scope of amendment made by the finance No.2 Act 2014 - as argued there is no doubt the tax was deducted at source from the impugned payments but was not deposited on or before the due date of filing of the return but instead of entire disallowance 30% of the total sum should have been disallowed as per the amended provision of section 40 a(ia) - HELD THAT:- It is true that the amendment made by the finance No.2 Act 2014 is effective from 01.04.2015 but we are of the considered view that it has retrospective effect as held by the coordinate Bench in the case of Smt. Kanta Yadav [2017 (5) TMI 1565 - ITAT NEW DELHI] modify the orders of the authorities below and direct the Assessing Officer to restrict the addition to 30% of the total addition made on account of deduction of TDS u/s 40(a)(ia). Decided in favour of assesee partly. Ad-hoc disallowance of 20% of expenditure - HELD THAT:- AO himself mentions that the expenses claimed by the assessee were also test checked and while making the addition the AO says that the books of account vouchers were not produced. The logical question arises if the books and vouchers were not produced then from where the AO test checked the expenses. We do not find in the assessment order where the AO asked the assessee to produce books of accounts / vouchers for verification. Once again a logical question arises why 20% and why not 30, 50 even 100%. Without pointing out any specific defect in the audited books of accounts the AO cannot and should not make any estimated addition. We, therefore, direct the AO to delete the impugned addition - Decided in favour of assesee. Levy of penalty u/s. 271 (1)(c) - allegation of non specification of clear charge - defective notice u/s 274 - HELD THAT:- We are of the considered view that when the notices issued by the AO are bad in law being vague and ambiguous having not specified under which limb of section 271(1)(c) of the Act, the penalty proceedings initiated u/s 271(1)(c) are not sustainable. Decided in favour of assesee.
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