Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2015 (4) TMI 222

r was prepared to book the amount which does not mean that entire payment was made in a single day. The payments are not covered under the provisions of section 40A(3) of the Act, except the payments of ₹ 11,493/- (40,000- 28,507) paid on behalf of Kamlesh Bansal and ₹ 29,528/- paid in cash to Harish Express service which are hereby confirmed. The balance addition of ₹ 1,94,974/- [2,35,995/ - (29,528+11,493)] made on this count is, accordingly, hereby deleted - Decided partly in favour of assessee.

Difference of salary between salary sheet submitted and profit and loss account - CIT(A) deleted the addition - Held that:- The difference of ₹ 3,88,OOO was on account of the fact that salary register being maintained was for ESI purposes and did not cover the salary of two employees (i.e. Gunjan Chhabra and Vandana Desai) working in Faridabad branch (as they were not covered under the purview of same). The month-wise and branchwise charts of salary for both as per salary register and books of accounts were submitted to the AO. The above difference was also explained by way of another chart wherein details of salary paid to the 2 employees not covered u .....

X X X X X X X

Full Text of the Document

X X X X X X X

t have been furnished during the course of the assessment proceedings as well as in the appellate proceedings, which have been placed on record. Also, all the depots are registered with the VAT department in the respective states. Thus AO was not justified in making addition on account of rent expenses - Decided in favour of assessee. - I.T.A. No. 4272 /Del/2011 - Dated:- 31-3-2015 - Shri G. C. Gupta And Shri T. S. Kapoor,JJ. For the Appellant : Shri P Dam Kanunjha, Sr. DR For the Respondent : Shri K Sampath, Adv, Shri V Rajkumar, Adv. ORDER Per T. S. Kapoor, AM: This is an appeal filed by Revenue against the order of Ld. CIT(A) dated 27.06.2011. At the outset, Ld. D.R. invited our attention to revised grounds of appeal which read as under: 1. Whether in the facts and circumstances of the case, the CIT(A) has erred in deleting the addition made under section 40A(3) of the Act, as all additions made come within the purview of section 40A(3) as per clear findings given in the assessment order." "2. Whether in the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of ₹ 4,60,462/- made on account of difference of salary between salary she .....

X X X X X X X

Full Text of the Document

X X X X X X X

have to be substantiated with evidence to be allowable and in this case the rent expenses claim have not been substantiate. 2. Ld. D.R. invited our attention to various observations of A.O. read relevant findings of A.O. and submitted that the A.O. had rightly made addition and Ld. CIT(A) was not justified in deleting the same. He heavily placed his reliance on the order of A.O. 3. Ld. A.R. on the other hand heavily placed reliance on the order of Ld. CIT(A) and submitted his argument ground wise. Regarding 1st addition made by A.O. in respect of violation of provisions of Section 40A(3) the Ld. A.R. submitted that the assessee had made payments through imprest account and each individual payment was less than ₹ 20,000/- and in this respect he invited our attention to paper book page 10 onward wherein office expenses amounting to ₹ 26,442/- were debited and imprest account was credited with the similar amount. Ld. A.R. further submitted that pages 11 to 15 also comprised of payments made through imprest account and each individual payment was less than ₹ 20,000/-. Similarly, he took us to paper book page 18, wherein ₹ 22,000/- was debited and imprest account .....

X X X X X X X

Full Text of the Document

X X X X X X X

Vide submission dated 13.12.2010, the assessee gave certain submissions in respect of the said expenses, the said submissions have been examined and remarks thereon are delineated below in tabular form:- In view of the remarks above, the Assessing Officer added the aggregate of the said sums ₹ 2,35,995/- u/s 40A(3) to the income of the assessee. It has been submitted by the Ld. Counsel in this regard that the appellant had made certain payments in cash during the year. However, the AO disallowed them on the ground that the payment has exceeded a sum of ₹ 20,000/-, and thus, could not be allowed in view of section 40A(3) of the Income-tax Act, 1961. However, the AO has disregarded the submissions of the appellant in respect of facts of the instant case. All disallowances under the above provisions have been discussed in detail below. ⦁ ₹ 26,442/- cash paid to Kalinga International- The expenses pertained to, 7 cash bills (pertaining to different dates) and just the fact that one voucher has been prepared cannot result in conclusion of the fact that cash payment had been paid exceeding sum of ₹ 20,000 in a single transaction. One of the employees in the .....

X X X X X X X

Full Text of the Document

X X X X X X X

from M/s Modern Sports who was unknown to the appellant. The event went on for 4 days (i.e. from March 7_10th, 2008). The above payments were being made to the vendors 0(1 a milestone basis. Further, payments were made on different dates from the imprest account. The voucher clearly proves the fact that imprest had been used for making the payments. The details of imprest were provided by the person (maintaining the account) on March 31st, 2008, whereas the tournament was held from March 7-10, 2008. Also, there were 2 umpires, whose charges were fixed at ₹ 1,000 per umpire per day. These payments were made directly to the umpires on daily basis. However, single voucher was prepared to book the amount which does not mean that entire payment was made in a single day. ⦁ ₹ 44,625/- cash paid to Sumer Lal Caterer for breakfast and lunch during cricket match - The caterer was hired for the aforesaid tournament and even in his case, the entire payment was effected on milestone basis. Further, payments were made on different dates from the imprest account. The voucher clearly proves the fact that imprest had been used for making the payments. The caterer was unknown to t .....

X X X X X X X

Full Text of the Document

X X X X X X X

tion has been examined. Without prejudice, even if the contention of the assessee is considered, there is still a difference of ₹ 72,153/- since the salary amount paid to two employees is ₹ 3,88,OOO/- Accordingly, it is clear that the assessee's explanation is incorrect and difference of salary (Faridabad Branch) between salary sheet submitted and P&L account amounting to ₹ 4,60462/- is not due to the reason adduced by the assessee, and accordingly, addition of ₹ 4,60462/- is made to the income of the assessee. It has been submitted by the Ld. Counsel in this regard that the salary register was submitted to the AO which totaled to ₹ 1,31,33,634. However, the profit and loss account showed a debit amount of ₹ 1,35,21,634/-. The AO disallowed ₹ 4,60462. In this regard, it is to be noted that firstly, the difference of ₹ 3,88,OOO was on account of the fact that salary register being maintained was for ESI purposes and did not cover the salary of two employees (i.e. Gunjan Chhabra and Vandana Desai) working in Faridabad branch (as they were not covered under the purview of same). The month-wise and branchwise charts of salary for .....

X X X X X X X

Full Text of the Document

X X X X X X X

by way of a table below: Particulars As Actual considered by AO computation Total value of Stock which caught fire (A) 23,00,000 23,75,536 Less: Claim filed before the insurance company (8) 21,11,588 21,11,588 Claim disallowed by AO [(C}=(A)- 1,88,412 (B)] Input credit which anyways is 2,63,948 • not allowable by Insurance company while granting claim (D) Claim filed with Insurance company (B) 21,11,588 Less: Approved by Insurance Co. 19,71,052 (E) Loss on account of unapproved claim (F) 1,40,536 Total loss as claimed by the appellant [(G)=(D)+(F)] 404,484 The essence of VAT legislation is that it provides credit/ set-off for input tax, i.e. tax paid on purchases, against the output tax, i.e. tax payable on sales. VAT credit is available in respect of all purchases made and taxes paid thereon within the state. It is pertinent to note the fact that the concerned VAT legislation does not provide for availability of input credit against the output tax liability in case of loss of stock by fire, etc. Moreover, the input credit is even not available in a case where there has been normal loss, like evaporation credit is available only in respect of goods which have been or would be .....

X X X X X X X

Full Text of the Document

X X X X X X X

ally being paid by the appellant after escalation was a sum of ₹ 8,ll,072/-. Further, the other rent payments have also been made by account payee cheques. Tax has been deducted at source under section 1941 of the Act, wherever the payments exceeded the specified limits. The premises-wise details of rent paid by the appellant have been furnished during the course of the assessment proceedings as well as in the appellate proceedings, which have been placed on record. Also, all the depots are registered with the VAT department in the respective states. In view of the above discussion, it is hereby held that the Assessing Officer was not justified in making addition on account of rent expenses as above. The addition of ₹ 11,76487/- made on this count is, accordingly, hereby deleted." 6. From the above findings of Ld. CIT(A), we find that for each and every addition made by A.O. on the basis of submissions of assessee, Ld. CIT(A) has analyzed the facts and figures and has very rightly allowed the relief to assessee during appellate proceedings. In respect of first addition made u/s 40A(3), Ld. CIT(A) has analyzed each transaction and has held that individual payments m .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||