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2016 (6) TMI 39 - ITAT DELHI

2016 (6) TMI 39 - ITAT DELHI - TMI - Disallowance of the legal expenses - Held that:- AO has disallowed the legal expenses only on the ground that these expenses were not related to the business activities of the assessee. The bills and vouchers produced in the paper book depicts that the assessee have been taking legal advisers from advocates and consultants. Considering the kind of activity carried on by the assessee there is a need for day-to-day consultation with advocates and consultants in .....

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ied out by them during the year. Such situations cannot be categorized and disallowed under prior period expenses. Since the bills have been received in the year under consideration the liability for payment of these expenses also gets crystallized during the year under consideration. - Decided in favour of assessee

Addition in respect of unaccounted sale - Held that:- AO proceeded to make addition on the sale amount received from other parties, on the basis, as the assessee had taken .....

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(1954 (10) TMI 12 - SUPREME Court) and Kulwant Rai (2007 (2) TMI 185 - DELHI High Court ) we delete the addition made by the assessing officer on account of unaccounted sales. - Decided in favour of assessee - I.T.A .No.-1176/Del/2014 - Dated:- 26-4-2016 - SHRI G.D. AGRAWAL, HON BLE VICE PRESIDENT AND SMT. BEENA PILLAI, JUDICIAL MEMBER For The Assessee : Sh. Ved Jain, Adv., Sh. Ashish Goel. Adv., Sh. Ashish Chadha, CA For The Department : Sh. P. Dam Kanunja, Sr. DR ORDER PER BEENA PILLAI, JUDICI .....

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iation of facts and recording of proper finding. 2. (i) That on the facts and circumstances of the case, the CIT(A) was not justified in sustaining addition of ₹ 1,56,24,699/- in respect of alleged unaccounted sale without their being any evidence or material in respect of the same. (ii) That in this case, survey was carried out and on the basis of evidence and material, the unaccounted sale was duly subjected to tax and as such their cannot be any presumption about any further sale. (iii) .....

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ding of plant and machinery and generation of electricity. During the year under consideration the assessee had shown income from business and short term capital gain. The case was selected for scrutiny and notices under section 143(2) and 142(1) were issued. A survey operation was conducted at the business premises of the assessee on 31. 01. 08. At the time of survey, the assessee admitted sales of ₹ 3.72 crores to M/s. Saini Trading Co., outside the books of accounts. The Ld. AO, observe .....

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e ground that these expenses have been incurred by the assessee in relation to its sister concern. 3. Aggrieved by the order of the Ld. that you the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) confirmed the additions made by the Ld.AO. 4. Aggrieved by the order of the Ld. (A), the assessee is in appeal before us now. 4.1. Ground No.1: This ground pertains to the disallowance of the legal expenses amounting to ₹ 6,91,171/- the ld.AR submitted that the legal expenses a .....

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aised in the name of the assessee. During the course of the argument to learn and ADR has filed documents relating to an ongoing litigation before the Hon ble jurisdictional High Court wherein the assessee is a party the Ld. AR submitted that the assessee have been holding conferences and meetings with the ado dates and councils in respect of the legal matters pending before the Hon ble court. 4.2. On the contrary the Ld. DR relied upon the orders passed by the authorities below. 5. We have prod .....

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e assessing officer has not disputed the genuineness of the expenses incurred by the assessee. The Ld. AO has disallowed the legal expenses only on the ground that these expenses were not related to the business activities of the assessee. The bills and vouchers produced in the paper book depicts that the assessee have been taking legal advisers from advocates and consultants. Considering the kind of activity carried on by the assessee there is a need for day-to-day consultation with advocates a .....

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for any work carried out by them during the year. Such situations cannot be categorized and disallowed under prior period expenses. Since the bills have been received in the year under consideration the liability for payment of these expenses also gets crystallized during the year under consideration. 5.1. We are thus inclined to allow this ground of appeal raised by the assessee. 6. Ground No. 2: the next ground relates to the addition of ₹ 1,56,24,699 in respect of unaccounted sale. The .....

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m other parties. He submitted that the assessing officer has made this addition entirely on guess work. The Ld. AR placed his reliance upon the decisions of Hon ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd.,Vs. CIT reported in 26 ITR 775 and the decision of Hon ble jurisdictional High Court in the case of CIT vs. Kulwant Rai reported in 291 ITR 36. 7. On the contrary the Ld.DR relied upon the orders of the authorities below. The Ld.DR placed his reliance on the judgment of Andhr .....

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