TMI Blog2017 (4) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... way of remission or cessation of the liability. In such a case the section says that whatever benefit has arisen to the assessee in the later year by way of remission or cessation of the liability will be brought to tax in that year. The principle behind the section is that the provision is intended to ensure that the assessee does not get away with a double benefit - once by way of deduction in an earlier assessment year and again by not being taxed on the benefit received by him in a later year with reference to the liability earlier allowed as a deduction. The assessee has shown outstanding liability in his accounts. The ld.Revenue authorities nowhere demonstrated as to how this liability has ceased. The AO simply believed that 20% of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dated:- 11-4-2017 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER For The Assessee : Mrs.P.M. Jagasheth For The Revenue : Mr. Kailash D. Ratnoo, Sr.DR ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-I, Surat dated 22.1.2014 passed for the Asstt.Year 2007-08. 2. In the first ground of appeal, the assessee has pleaded that the ld.CIT(A) has erred in confirming addition of ₹ 4,99,986/-. 3. Brief facts of the case are that the assessee has filed his return of income on 31.10.2007 declaring total income at ₹ 3,74,066/-. At the relevant time, assessee, Shri Shankarbhai Udhavdas Jatwani was carrying on busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O for an adhoc disallowance of outstanding liability at 20%. The ld.CIT(A) confirmed the difference between outstanding liability shown by the assessee and confirmation by M/s.S.L.Agrawal Co. This difference comes out to ₹ 4,99,986/-. This difference has been added to the income of the assessee. 5. With the assistance of the ld.representatives, we have gone through the record carefully. Addition was made by estimated disallowance of the liability shown by the assessee. Either liability is genuine or non-genuine. It cannot be disallowed at the rate of 20%. Apart from the above, section 41(1) of the Income Tax Act has been incorporated to cover a particular fact situation. The section applies where a trading liability was allowed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the liability in the account, unless it is established that this liability has ceased, it cannot be added in the income of the assessee. Therefore, we allow this ground of appeal, and delete disallowance. 6. In the next ground of appeal, the assessee is impugning confirmation of adhoc disallowance of ₹ 25,639/- out of car expenses. The ld.counsel for the assessee did not press this ground of appeal. Hence, it is rejected. 7. In the next ground of appeal, grievance of the assessee is that the ld.CIT(A) has erred in confirming the addition of ₹ 30,65,412/-. 8. Brief facts of the case are that the assessee in his proprietorship concern viz. New Amar Lignite has claimed transportation expenses of ₹ 1,53,27,061/-. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant's version cannot be accepted. The additional evidence filed during the appellate proceedings in respect of transportation charges relate to the years other than the year under consideration. However, in those documents, complete details of transportation expenses such as dates, vehicle numbers, name of the person to whom payment has been made, weight of material, payments made etc. have been mentioned. But, all these details are related to the years other than A.Y. 2007-08. In short, neither any details nor any bills and vouchers in respect of transportation expenses for A.Y. 2007-08 are available, except the figure of total amount of expenditure claimed in the return of income. Now, I come to the submissions of appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of section 194C of the Act. In my opinion, AO has rightly concluded that there are chances that the transportation expenses were covered u/s. 194C of the Act. In such situation, since the appellant has failed to establish that transportation expenses claimed by him are not covered by the provisions of section 194C r.w.s 40(a)(ia) of the Act, there is no option other than to sustain the disallowances made by AO. I, therefore, sustain the disallowance of ₹ 30,65,412/- made by AO and dismiss the ground of appeal. 10. The case of the assessee before the ld.CIT(A) was that the transportation expenditure was not the expenditure of the assessee. Assessee pays transportation charges to the transporters on behalf of his clients. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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