Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Forum Articles Highlights TMI Notes SMS News What's New Calendar Imp. Links Database More...
Extracts
Home List
← Previous Next →

Mr. Deepak Chandulal Lohana Versus Dy. Commissioner of Income Tax 22 (2) , Mumbai

Disallowance made under section 40A(3) - Held that:- The observations made by the Ld CIT(A) with regard to the date of entering into MOU are not material to the issue under consideration, since the sale of plots so purchased by the assessee has been accepted and the assessee is showing the same as his business income. Further, the question of disallowance u/s 40A(3) would arise only, if the purchases are accepted, i.e., with regard to the expenses with are otherwise allowable under the Act. Furt .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

atre and others - Held that:- We notice that the AO has accepted the cheque payment of ₹ 6.65 lakhs, which means that the assessing officer believes a portion of purchases and hence, in our view, he is not justified in disbelieving the remaining part. We may state here that the AO could have examined the said claim of purchases, by ascertaining the market value and accordingly proved that the payment of ₹ 22.00 lakhs made by way of cash is in excess of the prevailing market value, in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hat the Ld CIT(A) has also committed error in confirming this disallowance. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the assessing officer to delete this addition.- Decided in favour of assessee.

Disallowance made under section 14A of the Act - Held that:- The dividend received from mutual funds has not been claimed to be exempt, but offered to tax. The AO has worked out the disallowance by considering the investments made in mutual funds also. Since, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

With regard to car and telephone expenses, we also agree with the view of the AO that the involvement of personal element cannot be ruled out. However, with regard to the Business promotion expenses, we are of the view that the AO should have analysed the nature of expenses before coming to such a conclusion. We notice that the Ld CIT(A) also did not examine this aspect. Accordingly, we set aside the order of Ld CIT(A) and direct the AO to make disallowance out of Car and Telephone expenses onl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ct; b) Disallowance on purchase of land from M/s Laxman Mhatre and others; c) Disallowance made under section 14A of the Act; and d) Adhoc Disallowance made out of expenses. 3. The facts relating to the case are that the assessee is engaged in the business of purchase and sale of Gaothan Plots in Navi Mumbai area. The assessing officer completed the assessment by making the additions listed above. With regard to the disallowance of ₹ 22.00 lakhs made out of purchase of land, the AO did not .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the view that the assessee has violated the provisions of section 40A(3) of the Act by making payments by way of cash and accordingly asked the assessee to clarify the same. It is pertinent to note that the provisions of sec. 40A(3) provide for disallowance of expenditure, if payment is made in a sum exceeding ₹ 20,000/- otherwise than by account payee cheque or account payee bank draft. In reply, the assessee submitted that the cash payment made to any individual person on any given date .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sideration and further the MOU was entered into by the assessee much prior to the date of allotment of plots under 12.5% scheme drawn by the CIDCO. Accordingly, the ld. CIT(A) took the view that the claim of payment of cash was not confirmed by the assessee. When questioned, the assessee filed details of payment paid to the sellers and also filed an affidavit given by the Manager of the assessee who deposed that he did not pay any sum exceeding ₹ 20,000/- on a single day. Further the asses .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

u/s 40A(3). 6. We heard the parties on this issue and perused the record. We notice that the assessee has furnished ledger account copies of the sellers of plot and a perusal of the same would show that the payment made to each of the seller was less than ₹ 20,000/- in a day and hence the said payments did not exceed the limit prescribed under the provisions of section 40A(3) of the Act. There is no dispute with regard to the legal position of law that the disallowance u/s 40A(3) of the Ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

confirmation letters, wherein they have confirmed that they did not receive cash exceeding ₹ 20,000/-. Thus, we notice that the employee of the assessee who made disbursements have confirmed about the factual aspects and the same is also corroborated with the entries made in the books of account. Further, the recipients of the cash have also confirmed the said position. Thus, it is seen that all the parties to the transactions have confirmed the factual aspects and the same is also corrob .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ecord. The said action of the assessing officer would show that he has made the disallowance u/s 40A(3) of the Act on surmises and conjectures. It is well settled proposition of law that the suspicion, how so ever be strong, cannot replace the evidences available on record. The Ld CIT(A) has observed that the confirmation letters filed by the sellers of the plot did not give the details of payments received by them and hence he rejected the same. However, the details are available in the books o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e., with regard to the expenses with are otherwise allowable under the Act. Further, we notice that the assessing officer did not examine the recipients of the cash in order to disprove the claim of the assessee as well as the confirmation letters given by them. Hence, we are of the view that the disallowance made u/s 40A(3) of the Act is not justified. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the assessing officer to delete the impugned addition. 7. The next iss .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

very same amount was disallowed by him u/s 40A(3) of the Act, the AO gave telescoping benefit to the same and accordingly did not make separate addition. The ld. CIT(A) also confirmed the disallowance so made by the AO. 8. We have heard the parties on this issue and perused the record. We notice that the AO has taken the view that there is no MOU between the assessee and Laxman Mhatre and others. Accordingly, he has proceeded to disallow the cash payment of ₹ 22.00 lakhs by holding that t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

wed the very same amount of ₹ 22 lakhs u/s 40A(3) of the Act, meaning thereby, the AO himself has accepted the genuineness of purchases as well as the payments, since the question of disallowance u/s 40A(3) would arise only in respect of genuine expenditure only. We further notice that the assessee has entered into a MOU with M/s Laxman Mhatre and others for purchasing the land for a sum of ₹ 28.65 lakhs, out of which a sum of ₹ 22 lakhs was paid by way of cash and the balance .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, in which case, there could have been some justification. We notice that the AO did not make any such enquiries. In fact, as stated earlier, the AO has proceeded with the misconceived notion that there is no MOU, which was factually incorrect. It is well settled that the AO cannot be given a chance for mistake committed by him. Accordingly, we are of the view that the AO has made the disallowance of ₹ 22 lakhs on misconceived notions, without properly examining the documents. We also noti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssee. The ld. CIT(A) also confirmed the same. 10. We heard the parties on this issue. The Ld A.R submitted that the disallowance worked out by the AO is exceeding the amount of dividend and accordingly pleaded that the disallowance made by the AO may be restricted to the amount of dividend. He further submitted that the dividend of ₹ 11,239/- received from the mutual funds were not claimed as exempt and accordingly it has been offered to tax. However, the AO has worked out the disallowance .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

  ↓     Latest Happening     ↓  

Forum: GST return filing software online | Easy GST compliance management

Forum: Input credit of gst paid on urd

Forum: 3B mistake

Forum: Excise duty credit on finished stock at additional place of business.

Forum: Input tax credit

TMI Note: Capital Gain - transfer of right in the land or transfer of land itself - addition u/s 50C - Harassment to the honest tax payers

Highlight: Option to avail composition scheme under GST by electronically filing an intimation in FORM GST CMP-02 and FORM GST ITC-03 upto 30-9-2017 - See Rule 3(3A)

Forum: GST on Notional rent

Forum: GST ON SALES PROMOTION

TMI Note: Does ICDS apply for the purposes of computing exemption u/s 11 to 13.

Highlight: Voluntary Reporting of Estimated Current Income and Advance Tax Liability - CBDT issues draft notification

TMI Note: Certain ICDS provisions are inconsistent with judicial precedents. Whether these judicial precedents would prevail over ICDS.

Highlight: Provisions of ICDS shall prevail w.e.f. AY 2017-18 to the transactional issues dealt therein over earlier judicial pronouncements.

Notification: Levy of anti dumping duty on New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16 originating in, or exported from China PR

News: Voluntary Reporting of Estimated Current Income and Advance Tax Liability

TMI Note: In case of conflict between ICDS and other specific provisions of the Income-tax rules, 1962 governing taxation of income like rules 9A, 9B etc. of the Rules, which provisions shall prevail.

TMI Note: Does ICDS apply to computation of Minimum Alternate Tax (MAT) u/s 115JB of the Act or Alternate Minimum Tax (AMT) u/s 115JC of the Act.

TMI Note: Where a term has not been defined under ICDS, nor under the Act, but has different interpretations given to it by the courts in tax cases, and in ICAI Accounting Standards, which interpretation would prevail while interpreting ICDS.

TMI Note: Whether the provisions of ICDS apply to a non-resident who claims the benefit of a double taxation avoidance agreement (DTAA).

TMI Note: In case any of the ICDS provisions is contrary to a circular or press release issued by the CBDT, which would prevail over the other.

TMI Note: ICDS-I requires disclosure of significant accounting policies and other ICDS requires specific disclosures. Where is the taxpayer required to make such disclosures specified in ICDS.

Notification: Income Computation and Disclosure Standards (ICDS) - New ICDS to be effective from AY 2017-18

News: RBI Reference Rate for US $

Highlight: GST - Detention of goods under transport - discrepancy in documents - the statutory provisions provide a mechanism for adjudication following detention of goods including for the provisional release thereof pending adjudication - HC

Highlight: Reassessment - first few paragraphs of the assessment order dealt with objections and disposed of accordingly - Unfortunately, the manner in which the AO has decided the issue is wholly unsustainable in law - HC

Highlight: Business expenditure u/s 37 - liquidated damage - breach of contract terms - Expenditure was not incurred for any purpose which is an offence or which is prohibited by law - cannot be disallowed - HC

Highlight: Valuation - inclusion of reimbursement of expenses - managing participation of clients in certain mela, fairs, promotional activities etc. - They are liable to service tax on the gross amount received - They cannot restrict their tax liability to only agency commission

Highlight: TDS liability - ITAT confirmed the liability - We do not see how it is possible for us to uphold the order of the Tribunal and when it purports to decide two Appeals of the Revenue by single paragraph conclusion - HC

Highlight: Reopening of assessment - sufficiency of material available with the AO to form a belief that income chargeable to tax had escaped assessment - bogus purchases - seller refused to respond - notice would not be interfered with - HC

Highlight: Exemption u/s 11 - education activities - transport and hostel facilities surplus cannot be considered as business income of the assessee society

News: Draft Notification for insertion of new rule 39A in the Income-tax Rules, 1962 comments and suggestions-reg.

Highlight: Genuineness of labour wages expenses, embroidery charges, fabrication expenses etc. - getting work done through small workmen who do not have any permanent place of residence - disallowance of ad hoc expenditure deleted.

Highlight: Project import - Since the goods were never used for the purpose for which it was imported, the actual user condition has been violated - Redemption fine and penalty imposed.

Highlight: Penalty u/s 112 (a) - CHA - Lack of due diligence and failure to take more precautions can not, by itself, bring in penal consequences

Highlight: Import of services - GST - The fact that those services were received outside India will not change the fact that the services have been paid for by the beneficiary appellant, who is located in India. - Demand confirmed.

Notification: SEZ for IT/ITES at Madhurwada Village, Visakhapatnam District in the State of Andhra Pradesh - denotified.

Highlight: Merely because payment is received in Indian rupee, it cannot be said that payment against export has not been received in convertible foreign exchange.

Highlight: Merely vehicle numbers was not mentioned on the invoices cannot be the reason to deny Cenvat Credit

Highlight: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017 - Circular

Circular: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017

News: Auction for Sale (Re-issue) of Government Stocks

Article: TDS APPLICABILITY ON GOVERNMENT CONTRACTS UNDER GST (Under Section 51 of the CGST Act, 2017)

News: Manmohan takes potshots at note ban, 'hasty' rollout of GST

News: GST on petrol, diesel requires wider discussion: Nitish

Article: WHEN CAN ONE TAKE ITC FOR RCM CASES?

Notification: TDS liability under Section 51 of CGST, 2017 come into force w.e.f. 18-9-2017 - Persons liable to deduct TDS from payment made or credited to the supplier of taxable goods or services specified

Notification: Central Goods and Services Tax (Seventh Amendment) Rules, 2017

Notification: Seeks to extend the last date for filing the return in FORM GSTR-3B for the months of August to December, 2017

Circular: Filing of Special Leave Petition against Orders of Hon'ble High Courts staying Collection of Tax under GST- reg.

Highlight: Exemption u/s 54F - LTCCG - once entire net consideration is invested, the absence of completion certificate cannot be a ground to deny the benefit of deduction.



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version