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Issues involved: Appeal against CIT (A) order for assessment year 2004-2005 regarding disallowance of business expenses and addition u/s 68 of Income Tax Act, 1961.
Business Income: The assessee claimed business expenses of &8377; 2.14.27,876 for rehabilitation of a sick industry under lockout, but AO disallowed most expenses due to lack of business activity. CIT (A) upheld the disallowance, allowing only 5% expenses. Assessee argued for restart efforts and necessity of expenses citing relevant case laws. Tribunal found expenses to be revenue in nature, allowed claim due to temporary lockout for financial reasons, and need for production restart. Addition u/s 68: Assessee took loans from various parties, but failed to provide confirmation for a &8377; 1 lac loan from one party. AO added this amount u/s 68. Assessee later submitted loan confirmation to CIT (A), but it was rejected as additional evidence. Tribunal admitted the evidence, noting banking channel transaction and directed AO to verify and decide the issue accordingly. In conclusion, the appeal was partly allowed by the Tribunal on 26th April, 2013.
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