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TMI Blog2012 (11) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of section 40A(3) - Cash payment - assessee submitted that the provisions of sect ion 40A(3) are not attracted in this case as it is protected by clause (d) to Rule 6DD of Income Tax Rules, 1962 – Held that:- Relevant entries in respect of salary expenses in the books of account of the assessee are not available on record. In the absence of such details, we could not appreciate the contention of Shri Ajay Jain, Ld. Counsel for the assessee – matter remanded to Assessing Officer Disallowance of telephone expenses – assessee submitted that telephone bills in the name of the company and the same were incurred for business purpose – Held that:- assessee submit ted that the assessee company has taken corporate connection in its own name and has given telephone connections to various employees and directors for business purposes only - service provider has issued the bill in the name of the company and all payments have been made by the company for business purposes only and it is only technical breach that at the time of leaving of employee and joining of new employee the change in name of user was not got registered in the records of telecom service provider - Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n support of the claim was given. According to Assessing Officer, the reply submitted by the assessee was not convincing and therefore, an addition of Rs. 23,32,578/ - was made to the income of the assessee as the assessee did not include development expenses in the valuation of closing stock of land at Kotkapura site. 5. On appeal, the CIT(A) held as under: - 3.3 I have considered the submission of the Ld. counsel for the appellant. The appellant has submitted that in assessment year 2006-07, the Assessing Officer had enhanced the value of closing stock as on 31.3.2006 by Rs. 1,46,577/ - and this should be taken as the value of opening stock as on 1.4.2006. This content ion of the appellant is acceptable in view of the decision of the Hon'ble Punjab Haryana High Court in the case of Punjab Warehousing Corporation Ltd in ITA No. 670 of 2008 dated 28.1.2010. Hence, the Assessing Officer is directed to adopt the opening stock in this year as the closing stock as on 31.3.2006 determined for assessment year 2006-07. Ground of appeal No.2 is partly allowed. 6. We have heard the rival submissions and have also perused the materials available on record. Shri Ajay Jain Ld. Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Rs. 7,22,647/ -. 4. That the CIT(A) has not given any direct ion to adopt the same value of opening stock as on 01.04.2007 as the closing stock as on 31.3.2007 determined for assessment year 2007-08. 8. The Assessing Officer has discussed this issue in para 4 of the assessment order. The Assessing Officer observed that value of opening stock of Arvind Nagar, Mansa was shown at Rs. 2,33,75,850/ - while the area of land is 36,321.87 sq. yards resulting in value of opening stock of land per sq. yard at Rs. 643.57. The closing stock of area of saleable land of Arivind Nagar, Mansa is 29745.10 sqars The Assessing Officer determined the closing stock at Rs.1,91,43,054/ - by multiplying the area with the rate of 643.57 per sq. yards. The Assessing Officer noticed that the closing stock had been shown at Rs.1,84,20,407/-. Thus there was a difference of Rs. 7,22,647/ - in valuation of closing stock of Arvind Nagar, Mansa. The Assessing Officer required the assessee to show cause as to why the valuation of land of Arvind Nagar, Mansa should not be taken on the basis of value of opening stock. The only reply given by the assessee was that the closing stock of the land was made as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d therefore, it was submit ted that value taken by the assessee be accepted. Shri Ajay Jain, Ld. Counsel for the assessee also brought to our notice that the Assessing Officer has taken the same value for residential plot and SCO site. He further submit ted that in the opening stock 14 SCO sites were available to the assessee company and in the closing stock there were only 11 SCO sites and therefore, the average cost declined. He, therefore, submitted that the Assessing Officer could not appreciate the fact that the value of SCO site is always more than the value of residential plot and calculated the value by taking average of both residential and SCO site. It seems that both the authorities below have not considered the above submissions of the assessee. We, therefore, think it appropriate to set aside the order of CIT(A) on this issue and remand the same to the file of the Assessing Officer with a direct ion to take into consideration the above submissions of the assessee and decide the issue afresh on merits in accordance with law after affording due and reasonable opportunity of being heard to the assessee. Ground Nos. 3 and 4 of the appeal are allowed for statistical purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes. The Assessing Officer did not accept the explanation of the assessee observing that the assessee himself has provided the list of telephone users from its own record. He therefore, disallowed Rs. 94,964/-. 16. On appeal, the CIT(A) confirmed the disallowance of Rs.94,964/ -. 17. We have heard the rival submissions and have also perused the materials available on record. Shri Ajay Jain, Ld. Counsel for the assessee submit ted that the assessee company has taken corporate connect ion in its own name and has given telephone connect ions to various employees and di rectors for business purposes only. The company has also paid FBT on telephone expenses incur red during the year. Shri Ajay Jain, Ld. Counsel for the assessee also submit ted that company has taken corporate connect ion and has given names of the employees working and at the time of taking connect ion and by the passage of time there was change in employee and at the time of leaving of employee the phone is taken from the employee and is handed over to the new employee for the purpose of business of the company. He further submitted that the service provider has issued the bill in the name of the company and a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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