9911796707
TMI Blog2013 (10) TMI 865X X X X Extracts X X X X X X X X Extracts X X X X ..... ief and upholding the disallowance of Rs.300000/- out of Rs.997041/- as per Para 13 of the assessment order being purchase of consumable without properly appreciating the facts of the appellant. 4. The Ld. CIT (A) has erred in law and on facts in upholding the findings of assessing officer treating the purchase of machinery during the year amounting to Rs.1306817/- as not genuine and thereby wrongly disallowing depreciation of Rs.326704/- as per Para 13 of the order without properly appreciating the facts and ignoring the cogent supporting evidencing the purchase of machinery. 5. The Ld. CIT (A) has erred in law and on facts in upholding the disallowance of Bad-debts of Rs.20812/- as per Para 14(B) of the assessment order being debit and credit balances pertaining to business written off / written back by the appellant without properly appreciating the facts and wrongly applying the decision of Dhall Enterprise and Engineers P. Ltd. to the facts of the appellant. 6. The Ld. CIT (A) has erred in law and on facts in upholding the disallowance of Rs.113494/- as per Para 14 (C) of the order being Traveling Expenses without properly appreciating the facts. 7. The Ld. CIT (A) has gri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder these circumstances there is no justification for claiming such expense from the income of the relevant period. In view of this, the disallowance made by the A.O. is hereby confirmed." 4. Now the assessee is before us. Ld. Counsel for the appellant contended that there was a payment to Software Technology Park of India of Rs. 5,75,000/- due to award of Arbiter, the arbitration was started in F.Y. 05- 06 itself and hearing was going on. The assessee gathered that ultimate analysis it has to pay in pursuant to award to the Software Technology Park of India. The award was passed on 20th July, 2006 and accounts were finalized and audited on 12th September, 2006 i.e. after the date of order. As per accounting standard prescribed by the ICAI u/s. 145 of the IT Act, the assessee is required under the principle of prudence to account for all the non liability even though the said liability cannot be ascertained with certainty. Accordingly, the appellant had debited the payment of Rs.5.75 lacs in the p&l account and claimed as the expenditure. Alternatively, it was also argued that this expenditure is not allowed in the year under consideration, the same may be allowed in the year 07- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and other documents on record. Since the onus cast upon the appellant was not discharged properly the A.O. was justified in treating the purchases under reference as non genuine. In view of this, the addition made by the A.O. is hereby confirmed and the ground of the appellant against the same is hereby dismissed." 7. Now the assessee is before us. Ld. Counsel for the appellant contended that during the year under consideration the appellant had purchased bandwidth - costing 611590/- for which payments were made by cheque and no amount was outstanding at the close of the year. The ld. A.O. disallowed these expenses only the reasons that notice issued u/s. 133(6) could not be served by the postal authorities. The appellant had filed copy of ledger account of the said company. In its books, the payments were made through cheque from which the payment can be verified. This purchase has resulted into sale which has not been disputed. He further argued that he has discharged his onus and burden has been shifted on the A.O. to revert the same and requested to delete the addition. At the outset, ld. Sr. D.R. vehemently relied upon the order of the CIT(A) and argued that notice issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order. He noted that the notice issued u/s. 133(6) to Exatt Technology P. Ltd. could not be served. Further, the information received from Crux Technology, Krishna Enterprises, Aegis Infosys & Jaytronics were not matching with the accounts maintained by the appellant. He accordingly granted opportunity to the appellant to explain its position in this regard. He also asked the appellant to produce the authorized persons from these parties for verification of accounts. Since, the appellant did not comply with the requirements of the A.O., he treated the expenses to the tune of Rs.9,97,041/- as unexplained and added the same in the income of the assessee. 10. Being aggrieved by the order of the A.O., the assessee carried the matter before the CIT(A) who has confirmed the addition of Rs. 3 lacs out of disallowance of Rs. 9,97,041/-. The operation portion of the order is as under: "8.3 I have considered the facts and submission of the Ld. A.R. carefully. There is no dispute about the fact that the appellant's volume of business during the relevant period reduced to 38% as compared to preceding year, yet it cannot be imagined that it could carry out without incurring day to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upholding the finding of the Assessing Officer treating the purchase of machinery during the year amounting to Rs.13,06,817/- as not genuine and thereby disallowed depreciation of Rs.3,26,704/-. During the assessment proceeding, the A.O. asked the appellant to produce supplier of the goods for cross verification as there were discrepancies either in their accounts or their confirmation was not forthcoming. In response to the queries raised by the A.O., the appellant filed a reply explaining its position. These replies are discussed by the A.O. on bottom of page 9,10 & 11 of the order. He observed from the replies of the A.O. that no new fact was brought to prove the purchases under reference. He further referred to the inquiries made by him through his Inspector during which the antecedents of Krishna Enterprise and Crux Technology could not be proved. He accordingly treated the purchase of machinery amounting to Rs. 13,06,817/- as not been proved and disallowed the depreciation on the same at Rs.3,26,704/- accordingly. 13. Being aggrieved by the order of the A.O., the assessee carried the matter before the CIT(A) who had dismissed the appeal by observing as under: "9.2 I have c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Ltd. vs. CIT 295 ITR 481, as condition laid down by the Hon'ble Gujarat High Court in above case has not been fulfilled by the appellant. The assessee argued that the position on bad debt is very clear and Hon'ble Supreme Court in case of TRF Ltd. v CIT (2010) 323 ITR 397 (SC), law is settled and assessee has written off this bad debt in the account itself sufficient to claim bad debt which has been done in the account. Thus, he requested to allow the bad debt. At the outset, ld. Sr. D.R. relied upon the order of CIT(A). After considering the facts of the case, the bad debts had been written off by the appellant in the books of account u/s. 36(1)(vii) of the Act and is allowable deduction. Thus, this addition is confirmed by the CIT(A), is reversed. Accordingly, we allow the appeal on this ground. 16. Ground no.6 is against upholding the disallowance of Rs.1,13,494/- being traveling expenses. During the relevant period, the appellant claimed traveling expenses to the tune of Rs.2,16,669/- out of which Rs.1,13,494/- consisted of foreign travel. The A.O. gave reasonable opportunity of being heard on this issue but no details in respect of Mr. Amit Agrawal, who travelled foreign, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of criminal case should not arise. He also submitted a copy of the newspaper report and it is revealed that accused had given Rs. 66,000/- & 55,000/- to the relative. The identical issued was in A.Y. 01-02, which has been allowed by the CIT(A). He has drawn our attention on page nos. 256 to 261 which includes copy of FIR paper cutting and requested to allow the appeal in favour of the assessee. At the outset, ld. Sr. D.R. heavily relied upon the order of the CIT(A). After considering the facts of the case as revealed from the copy of FIR that there was misappropriation of fund for Rs. 2 lacs and placed the evidences on record. He has established the misappropriation of fund by the employees. Various Courts have held that it is allowable expenses, accordingly, we reverse the order of the CIT(A). 18. Ground no.8 is against not allowing corresponding deduction u/s. 80IA on the positive income on account of additions sustained while computing business income. The A.O. did not allow the 80I deduction on addition made by him of Rs.28,29,661/-. Ld. A.O. did not given any finding on it. The CIT(A) confirmed this ground by observing that this is not derived income from the manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
