Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (7) TMI 509 - ITAT DELHI

2016 (7) TMI 509 - ITAT DELHI - TMI - Disallowance being 50% of travelling expenditure - Held that:- CIT(A) has noted the facts that the husband of the assessee is actively involved in carrying on the business of the assesee and further authorised signatory of the proprietary concern. Further facts brought to our notice that during the year opening of three showrooms by the assessee and therefore the travelling expenses have been incurred. Furthermore merely because the expenses of the husband 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

ee new shops - Held that:- According to the provisions of section 30 (a)(ii) any expenditure on repairs and maintenance of the premises not owned by the assessee are allowable as deduction . Ld. CIT(A) has categorically held that expenditure towards electrical work, wooden flooring, AC fittings and other professional charges, which are of revenue nature and no advantage of enduring nature, has been obtained by the assessee as these are routine expenditure. On verification of expenditure by CIT ( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ld be pointed out by the AO. Furthermore in case of the payment of job work charges assessee has submitted the details showing the name, address, permanent account number of the job workers and the payment made to them is through banking channels. Furthermore, out of the four job workers two job workers responded and confirmed the transactions. In view of the above facts and in absence of any defect in the books of accounts and merely because two job workers did not respond to notices 133(6) , n .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of Section 41(1) of the Income Tax Act are applicable can also not be accepted by us and it is not reason for which addition has been made by the AO and further it is also not the cessation of any trade liability for which deduction in earlier years have been granted to the assessee. In view of this we confirm the finding of the Ld. CIT(A) in deleting the addition - Decided in favour of assessee - ITA No.:- 4719/Del /2012 - Dated:- 16-6-2016 - SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI PRASHANT .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t the husband is neither an employee nor a partner in the business of the assessee. Merely being an authorized signatory, does not make him entitled for claiming expenses in the business". 2. On the facts and in the circumstances of the case, Ld. CIT(A) has erred in deleting the additions ₹ 32,24,345/- treated the repair expenses as the revenue expenses of three lease shops. The assessee incurred expenses on repair and maintenance opened three new more shops on tenanted premises. The .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

concrete reason for fall in the GP rate. The AO has increased the GP on an average basis for the last two years and one next year. 4. On the facts and in the circumstances of the case, Id.CIT(A) has erred in deleting the addition of Rs.l,14,700/- un-secured loan with the reason that this loan does not relate the A.Y. under consideration, the addition of this amount cannot be made in this year. The decision of the CIT(A) deleting the addition of ₹ 1,14,700/- of unsecured loans from Ms. Anit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ing and manufacturing of garments. She filed her return of income of ₹ 12,77,110/- on 2nd November, 2009. During the course of assessment proceedings, some disallowances/ additions in dispute were made by Ld. AO, which are deleted by the Ld. CIT(A), and hence revenue has preferred this appeal. The ground wise disposal of appeal is as under :- 3. Ground No. 1 the first ground of appeal is against deletion of disallowance of ₹ 1,50,419/- being 50% of travelling expenditure incurred by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

various show rooms and therefore the travelling expenditure incurred for that purpose. It was further submitted by him that such travelling expenses were only ₹ 1,13,941/- and not ₹ 300838/- as computed by the AO. He referred to para No. 2 of the assessment order and stated that there is an error in totalling . Ld. DR relied on the order of lower authorities and stated that merely as the assessee s husband is authorised signatory expenditure on that count cannot be allowed. 4. We hav .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lowed unless there is a specific finding that these expenses are not incurred by the assessee wholly and exclusively for the purpose of the business. In the present case it is not controverted that husband of the appellant is actively engaged in the business of the assessee. In view of this we confirm the finding of the Ld. CIT(A) in deleting the disallowance of ₹ 150419/-. Further the expenditure stated by the Ld. AO in para No. 2 of the order is also arithmetically inaccurate as the tota .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

these expenditure towards repairs and maintenance are to be treated as capital expenditure because new assets for new showrooms are created. He also held that the new shops are opened and expenses are incurred before commencement of business and as these expenses are disallowable as capital expenditure. On appeal before Ld. CIT(A), the above addition was deleted. Ld. CIT(A) has held that all these shops are taken on lease and are for the purpose of business and the expenses incurred to make the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ue in nature and no capital asset is created. It was further submitted that assesee is in the business of trading of garments since long therefore, there are no new business set up during the year but it is an old business, which is expanded by opening three new shops. He therefore submitted that according to the provisions of section 30(a)(ii) the expenditure on repair in rented premises is allowable. 6. We have carefully considered the rival contentions and perused the order of the lower autho .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s electrical work, wooden flooring, AC fittings and other professional charges, which are of revenue nature and no advantage of enduring nature, has been obtained by the assessee as these are routine expenditure. On verification of expenditure by CIT (A), he has deleted the disallowance. Revenue did not controvert or could not point out specifically any expenditure resulting in to capital assets. In view of this we do not find any infirmity in the order of the Ld. CIT(A) and we confirm the order .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assessee makes major sales. However, AO rejected the reason and stated that the turnover of the assessee has increased due to opening of three new shops and further he also doubted the job work expenditure. He issued notice u/s 133(6) of the Income Tax Act to job workers for their verification. However out of four parties, in case of two parties confirmation could not be received. In view of this he adopted the average GP of last three years of 40.77% and compared it with current year GP of 31. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n provided. The assesee has also made payment to the job workers by cheques. Ld. CIT(A) further following the decision of Hon ble Jurisdictional High Court in the case of CIT vs. Jas Jack Elegance Exports (2010) 191 Taxman 386 deleted the addition. Therefore, revenue is in appeal before us. Ld. DR relied on the order of the AO and submitted that there is a significant downfall in the gross profit compared to the previous year and therefore the AO has rightly made the addition. Ld. AR on the othe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ddition has been deleted because of the reason that assesee is maintaining regular books of accounts and no defects could be pointed out by the AO. Furthermore in case of the payment of job work charges assessee has submitted the details showing the name, address, permanent account number of the job workers and the payment made to them is through banking channels. Furthermore, out of the four job workers two job workers responded and confirmed the transactions. In view of the above facts and 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

 

 

 

 

 



|| 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