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2012 (10) TMI 47 - AT - Income TaxDisallownace of expenses - depreciation, administrative expenses & donation - AY 2000-2001 - Held that - In the absence of any documentary evidence on record, that the assessee used plant and machinery during the course of its trading activities no depreciation can be allowed - against assessee. Disallownace of expenses - AY 2001-02 - Held that - Restore the issue to the file of CIT(A) to decide the claim of the assessee in respect of Rs.1,60,000 as the assessee furnished copy of FIR before the AO for theft on merits by a speaking order. However, in respect of balance amount of Rs.50,000 as sundry debtor the assessee failed to produce any documents at the time of remand proceedings and, accordingly, the AO could not verify the claim of the assessee. Hence, the claim of Rs.50,000 made by the assessee is rejected - partly in favour of assesseby way of remand. Claim of depreciation - Held that - As there is no dispute to the fact that there was no claim of the assessee for depreciation before the authorities below and the said claim is raised by the assessee before the Tribunal for the first time. Considering the facts of the case and the fact that no details were filed before the authorities below to consider the claim of the assessee for depreciation, thus additional ground for claiming depreciation is not maintainable as claim of the assessee for depreciation depends on the factual details which the assessee failed to furnish not only in the return filed but also during the course of assessment proceedings - against assessee. Addition on account of cash in hand - AY 2003-04 - Held that - Considering the fact that the said amount is appearing in the balance sheet which is duly audited, no justification to treat the said amount as undisclosed income of the assessee. Hence, the addition of Rs.5,09,555 is deleted by reversing the orders of authorities below - in favour of assessee. Disallowance of 50% of administrative expenses - Held that - The claim can be disallowed if the assessee has not established that amount in question has been wholly and exclusively laid out for the purpose of business. Since in the present case assessee has not been able to furnish the requisite proof to establish that the expenses aggregating to Rs.13,28,150 which has been disallowed by authorities below, was incurred wholly and exclusively for the business purposes of the assessee - against assessee. Disallowance of commission expenses - Held that - Assessee has not been able to establish whether any service was received to the assessee for the alleged payment of commission of Rs.20,02,250 to M/s. Gurudev Chemox Industries, Bangalore. Merely filing of said certificate at page 130 of PB does not establish that any service was received to the assessee - against assessee.
Issues Involved:
1. Depreciation disallowance 2. Administrative expenses disallowance 3. Donation disallowance 4. Loss by theft disallowance 5. Cash in hand addition 6. Commission expenses disallowance 7. Cash deposit in bank addition Issue-wise Detailed Analysis: 1. Depreciation Disallowance: The assessee claimed depreciation on plant and machinery despite ceasing manufacturing activities. The Assessing Officer (AO) disallowed the claim due to lack of evidence showing machinery use. The Commissioner of Income Tax (Appeals) [CIT(A)] partially allowed depreciation on buildings and motor cars but upheld the disallowance on plant and machinery. The Tribunal affirmed CIT(A)'s decision, rejecting the assessee's appeal due to insufficient documentary evidence. 2. Administrative Expenses Disallowance: The AO disallowed 50% of administrative expenses due to lack of proof. CIT(A) upheld disallowances where evidence was not provided. For A.Y. 2000-01, Rs.1,05,694 was disallowed; for A.Y. 2002-03, Rs.1,97,524; for A.Y. 2003-04, Rs.13,28,150; and for A.Y. 2004-05, Rs.1,82,880. The Tribunal upheld CIT(A)'s decisions, noting the assessee's failure to produce supporting documents. 3. Donation Disallowance: The AO disallowed Rs.9,000 claimed as donations due to lack of receipts. CIT(A) confirmed the disallowance, and the Tribunal upheld this decision as the assessee could not provide evidence. 4. Loss by Theft Disallowance: For A.Y. 2001-02, the assessee claimed a loss by theft of Rs.2,10,000. The Tribunal restored Rs.1,60,000 to CIT(A) for fresh consideration based on FIR evidence but rejected Rs.50,000 due to lack of proof. 5. Cash in Hand Addition: The AO added cash balances shown in balance sheets as undisclosed income due to lack of proof. For A.Y. 2003-04, Rs.5,09,555 was added, and for A.Y. 2004-05, Rs.4,39,472. The Tribunal deleted these additions, accepting the audited balance sheet entries. 6. Commission Expenses Disallowance: The AO disallowed Rs.20,02,250 claimed as commission expenses due to lack of details. CIT(A) confirmed the disallowance as the assessee failed to substantiate the claim. The Tribunal upheld this decision, noting the absence of evidence and TDS deduction. 7. Cash Deposit in Bank Addition: The AO added unexplained cash deposits as income. For A.Y. 2003-04, Rs.19 lakhs were added, and for A.Y. 2004-05, Rs.36,20,000. CIT(A) confirmed these additions due to lack of supporting evidence. The Tribunal upheld CIT(A)'s decisions, rejecting the assessee's claims. Conclusion: The Tribunal dismissed appeals for A.Y. 2000-01 and 2002-03, allowed in part for A.Y. 2001-02 for statistical purposes, and allowed in part for A.Y. 2003-04 and 2004-05. The decisions were based on the assessee's failure to provide adequate documentary evidence to support their claims.
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