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2016 (6) TMI 841 - ITAT KOLKATA

2016 (6) TMI 841 - ITAT KOLKATA - TMI - Undisclosed expenditure incurred for earning commission - Held that:- All the expenditure were claimed under different heads for earning different incomes for manufacturing dealing and commission, along with salary and other expenses were debited to the profit & loss account. There was nothing brought on record by the AO to establish that any expenditure was separately incurred by the assessee in relation to commission income. In order to attract provision .....

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00/- as the assessee failed to furnish evidence in support of the expenses claimed. The CIT-A found that all the details were available before the AO and incurred such amount of ₹ 32300/- constituted fees towards the renewal of mining license, consent fees to WBPCB, sampling and analysis charges paid to WBPCB Fees paid to West Bengal Directorate Employees Associations & fees paid for liasoning. In view of the same, We agree with the finding of CIT-A that all the payments were incurred for .....

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ds and relying on such evidence, the CIT-A opined that the contention of the assessee was correct and question of deducting TDS does not arise - Decided in favour of assessee - Addition u/s 41 (1) - Held that:- The trading liability was not ceased and payments were made thereafter as the CIT-A examined the liability was recorded in books of accounts for capital goods and it was not written off in the books of account and confirmations of the said creditors filed and subsequently the entire a .....

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a decision in the case of Hans Castings Pvt. Ltd. vs Collector of C. Excise, Kanpur [1998 (3) TMI 298 - CEGAT, NEW DELHI] where it held that the production can not be estimated on the basis of consumption of electricity. We find no justification in the order of AO in making addition on the basis of electric consumption in calculating the production on such estimation.- Decided in favour of assessee - Disallowance of excess depreciation - Held that:- AO acknowledged the details of addition o .....

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And Shri S. S. Viswanethra Ravi, Judicial Member For the Appellant : Shri A.K.Pande, JCIT, Ld.Sr.DR For the Respondent : Shri M.Satnaliwala, B.com, LLB,FCA, Ld.AR ORDER Shri S. S. Viswanethra Ravi, JM This appeal of the revenue arises out of the order of the CIT(A)-I, Kolkata in Appeal No. 511/CIT(A)-I/Wd-3(4)/09-10 dated 02-06-2010 against the order of assessment framed by the AO u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. The appellant Revenue has raised .....

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n the facts & circumstances of the case in deleting the addition of ₹ 46,15,761/- which was made by the Assessing officer U/s 40(a)(ia) for failure to deduct TDS as per section 194C of the IT Act against carriage inward / transport charges. (iv) That Ld CIT(A) has erred by accepting the assessee's contention that assessee had not claimed any transportation charges since goods were purchased on F.O.R basis hence the assessee was not liable for deduction of TDS as per section 194C . .....

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. (vii) Ld. CIT(A) has erred on the facts & circumstances of the case in deleting the addition of Rs. ₹ 56,78,595/- on account of undisclosed production without properly appreciating the fact that the AO has brought adequate evidence on record to prove that assessee had undisclosed production. (viii) On the facts & circumstances of the case the order of Ld CIT (A) is perverse, hence same may be set aside and order of AO be restored. (ix) The appellant craves leave to amend, modify .....

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he head unexplained expenditure of ₹ 6,68,741/- . The A.O was of view that the assessee earned commission and for not furnishing any details regarding such commission and the AO treated 10% of such commission income as expenses for earning such commission and added back as unexplained expenditure. The CIT(A) observed that if any expenditure incurred for earning the commission income and if any expenditure was not claimed, the same can not be added to the income as it is allowable as revenu .....

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inst law. The CIT-A examined and found all the expenditure were claimed under different heads for earning different incomes for manufacturing dealing and commission, along with salary and other expenses were debited to the profit & loss account. There was nothing brought on record by the AO to establish that any expenditure was separately incurred by the assessee in relation to commission income. In order to attract provision U/Sec 69C of the Act, the onus is on the AO to show that the asses .....

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owards fees, subscription and taxes in the profit and loss account. The assessee submitted details of such expenses to an extent of ₹ 34,024/- only, but could not produce any details regarding the amount to an extent of ₹ 32,300/- and for such failure, the AO added the same to the income of assessee. Before the CIT-A, the assessee contended that all details of entire expenditures were furnished at the assessment proceedings and sum constituted thereon was incurred towards payment of .....

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ails were available before the AO and all were incurred towards payments to Government of West Bengal by way of challans. We find that the A.O added an amount of ₹ 32,300/- as the assessee failed to furnish evidence in support of the expenses claimed. The CIT-A found that all the details were available before the AO and incurred such amount of ₹ 32300/- constituted fees towards the renewal of mining license, consent fees to WBPCB, sampling and analysis charges paid to WBPCB Fees paid .....

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61/- The AO found that the assessee did not show transportation charges or carriage inward separately in the accounts and the AO calculated average percentage of carriage inward with respect of purchase and concluded that the minimum expenditure for carriage inward borne by the assessee company was @ 17.57% of purchase i.e ₹ 46,15,761/-. The assessee submitted before the CIT-A that the assessee had not claimed any transportation charges as the goods were purchased on FOR basis. The CIT -A .....

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and did not furnish the same separately in order to avoid the liability of deduction of TDS. The Ld.AR submits that the assessee submitted all the details before the AO and AO could not appreciate it proper manner and all those details are filed in the paper book. We find that the goods were purchased on F.O.R. basis are evident from the purchase bills of raw materials placed in the paper book and copies of bills which were produced before the A.O and CIT-A having examined such copies of bills s .....

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hed by the assessee that the transactions of involving capital goods are old and for non production of bill no s with amount, date of credit and status as on that date, the AO made the addition on account of cessation of liability. Before the CIT-A, assessee submitted that the liability was recorded in books of accounts for capital goods and it was not written off in the books of account. Confirmations of the said creditors filed and subsequently the entire amount was paid. All the details of pa .....

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ree with finding of CIT-A of which reproduced herein: As per section 41(l) where an allowance or deduction has been made in the assessment in respect of loss, expenditure or trading liability incurred by the assessee and subsequently during the previous year the assessee obtained, whether in cash or in any manner whatsoever any amount of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation, that amount can be added u/s 41 (1) of I.T. Act. .....

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ng liability was not ceased and payments were made thereafter as the CIT-A examined the liability was recorded in books of accounts for capital goods and it was not written off in the books of account and confirmations of the said creditors filed and subsequently the entire amount was paid. In view of the same the application of section 41 (1) of the Act was not justified. Therefore, ground no-4 is stands dismissed. 9. 5th ground as raised regarding addition on account of undisclosed purchase of .....

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him, is abnormal and for not giving any satisfactory explanation of such variation and the AO concluded that assessee had undisclosed production as well as unaccounted purchase. The AO made addition under the head unaccounted purchase ₹ 15,83,278/- and undisclosed production of ₹ 56,78,595/- totaling to ₹ 72,61 ,873/- . 10. Before the CIT-A, the assessee contended that all the details of consumption of raw material, production of Goods, consumption of electricity month wise we .....

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issions of the asseessee the CIT-A found as under: I have considered the order of the A.O. and the arguments of the A/R. The A.O. has not pointed out any defects in the books or accounts. The addition was purely on estimate and based on presumption. In view of this facts us stated above, the addition of ₹ 72,61,873/- stands deleted. 12. The Ld. DR points out that CIT -A did not consider that G.P rate shown by the assessee was very low compared to other years and it was due to undisclosed p .....

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Excise, Kanpur where it held that the production can not be estimated on the basis of consumption of electricity. We find no justification in the order of AO in making addition on the basis of electric consumption in calculating the production on such estimation. Ground no-5 is dismissed. 13. Ground no-6 relating to disallowance of excess depreciation of ₹ 1,50,223/- . The AO disallowed depreciation as claimed by the assessee on new assets as assessee could not furnish bills and related d .....

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