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2012 (11) TMI 49 - ITAT, AHMEDABADAdjustment on account of MODVET credit u/s 145A of the I.T. Act – Held that:- Difference in addition to inclusive of excise duty which have been confirmed by the CIT(A) but there is no difference in other years - addition on account of elements of tax duty, cess or fees paid in the sales, purchase and inventory is not justified Disallowance of customer loss - related to local party and foreign party - export sale was made through sister concern - claimed loss in November, 2004 and machinery was sold in 1998-99 but business loss was claimed in the year under consideration - transaction was related to sister concern who had exported the goods to Egypt – Held that:- Assessee has shown this sale transaction in income in earlier year or in current year as per Section 36(2) of the I.T. Act. The A.O. has not doubted the claim of the assessee and had not stated that these claims are bogus. The claim has been written off in the books of account. Law after 1st April, 1989, the assessee has to establish that debt was written off in the books of account not necessary to establish that in fact had become irrecoverable u/s 36(1)(vii) of I.T.A Act - customer loss in all three years are allowed subject to verify from the assessment record of M/s Himson Overseas Pvt. Ltd. that no deduction of same amount has been allowed by it’s A.O Disallowances of 50% of erection expenses - expenses have gone up whereas turnover has gone down - work was completed by the sister concern – Held that:- A.O. had not brought on record any material for excessive payment u/s 40A(2)(b) of the Act made to M/s Himson Techno Services Pvt. Ltd. The A.O. had disallowed lump-sum expenses on estimate basis. These payments were for erection and technical work. The comparable rates were not available being an engineering work - addition deleted Addition u/s 41(1) of the I.T. Act - Addition on account of cessation of liability – alleged that the assessee had shown creditor of Rs.37,25,695/- more than three years – Held that:- A.O. has not brought on record any evidence that the liability had been obtained by the assessee by way of remission or cessation. The burden of proof lies on the revenue. The appellant had filed confirmation of its sister concern - assessee has been showing these liabilities in balance sheet and same has not been written off – addition deleted Addition u/s 40(a) - late payment of TDS – Held that:- Assessee had paid TDS late, not within the financial year, it means payment in next year. The act has been amended w.e.f. 01.04.2010 and a proviso has been inserted in Section 40(a)(ia) of the Act - Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid - A.O. is directed to verify the payments and allow the TDS payment Disallowances of expenses u/s 14A of the I.T. Act – Held that:- Assessee received dividend income and tax free bond income - A.O. disallowed 10% expenses out of administrative managerial expenses - CIT(A) had found 10% expenses in A.Y. 2005-06 and in A.Y. 2006-07 reasonable and confirmed the addition. In A.Y. 2007-08 and in A.Y. 2008-09 he also confirmed addition made under Rule 8D - disallowance u/s 14A rightly confirmed
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