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2023 (1) TMI 853

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..... bed except for an addition in respect of telephone expenses. Thus, once the expenses have been accepted and the purchases and sales figures have already been accepted, the result in net profit cannot be tinkered with. This being so, we are of the view that the issue has already been considered by the AO and the revisionary proceeding on this issue is unsubstantiated and consequently the same is quashed. Software expenses, whether was capital or revenue in nature, had not been examined by the AO - As it is noticed that the issue has already been considered by the AO in reply to the query No.12 and also as it is noticed that the expenses in relation to the renewal of the tally software license, the same is purely revenue in nature also. The figure is only Rs.23,750/- and not Rs.6,86,817/- as proposed by the ld. Pr.CIT. Consequently, the revisionary proceeding on this issue stands quashed. Puja expenses did not relate to business of the assessee and the same need to be disallowed - The facts in the present case clearly show that the issue was part of the reply to the query No.12 raised by the AO in the course of original assessment. When the said query has been addressed and answered, .....

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..... perty not examined by the AO. Appeal of the assessee stands partly allowed.
Shri George Mathan, Judicial Member And Shri Arun Khodpia, Accountant Member For the Assessee : Shri Purnendu Bhusan Mohanty, CA For the Revenue : Shri M.K.Gautam, CIT-DR ORDER PER BENCH : This is an appeal filed by the assessee against the order of the ld Pr.CIT, Bhubaneswar-1, dated 05.01.2022, passed in DIN & Order No.ITBA/REV/F/REV5/2021-22/1038434821(1) for the assessment year 2017-2018. 2. It was submitted by the ld. AR that the assessee is an individual, who is running a proprietorship concern dealing sanitary and electrical fittings. The assessee is also a partner in two partnership firms doing similar business. The return filed by the assessee came to be processed and the assessment came to be completed u/s.143(3) of the Act on 10.12.2019, wherein certain disallowances have been made. It was submitted that this assessment order was the subject matter of revision by the ld. Pr.CIT, Bhubaneswar-1 u/s.263 of the Act. In the revisionary proceedings ld. Pr.CIT had proposed the following the issues:- i) the interest on the TDS was alleged to have not been disallowed; ii) the details of liabi .....

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..... en called for in the form of financial charges, administrative overheads, direct expenses and selling expenses. It was the submission that these issues are already been considered by the AO in the course of original assessment. Ld. AR further drew our attention to Annexure-3 of the Tax Audit Report filed before us wherein the auditors have satisfied that the amounts have been paid before the due date of filing of the return and consequently it was allowed. 7. In reply, ld. CIT-DR vehemently supported the order of the ld. Pr.CIT. 8. We have considered the rival submissions. As it is noticed that the issue has already been examined by the AO in the course of original assessment and as it is noticed that the amount has already been paid before the due date of filing of return, we are of the view that the revisionary proceedings on this issue is unsubstantiated and consequently the same is annulled. 9. The next issue being revision on provision for salary, it was submitted by the ld. AR that this is not a provision for salary but the provision for income tax which was carried forward from the earlier year. Ld. AR drew our attention to page 31 of the paper book, which is a copy of th .....

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..... actual expenses is only Rs.23,750/-. The ld. AR drew our attention to page 33 of the paper book, which is a copy of the profit and loss account wherein the software expenses have been shown at Rs.23,750/-. It was the submission that these expenses were in relation to renewal fees for the tally software. It was the submission that this is revenue in nature and this has also been looked into by the AO in reply to the question No.12 of the query. 16. In reply, ld. CIT-DR vehemently supported the order of the ld. Pr.CIT. 17. We have considered the rival submissions. As it is noticed that the issue has already been considered by the AO in reply to the query No.12 and also as it is noticed that the expenses in relation to the renewal of the tally software license, the same is purely revenue in nature also. The figure is only Rs.23,750/- and not Rs.6,86,817/- as proposed by the ld. Pr.CIT. Consequently, the revisionary proceeding on this issue stands quashed. 18. In respect of the next issue of puja expenses not being related to the business of the assessee, it was submitted by the ld. AR that the assessee is running a trading showroom. It was submitted that the turnover of the assess .....

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..... d the rival submissions. A perusal of the facts of the present case clearly shows that this amount has been specifically shown in the computation of the total income and is also supported by the return of income filed by the assessee. Admittedly this issue has not been examined by the AO nor any specific query has been raised by the AO in the assessment proceedings. This being so, we are of the view that the ld. Pr.CIT is right in invoking his powers u/s.263 of the Act on this issue. Consequently, the revisionary proceeding on this issue stands upheld. 24. Coming to the next issue of income from partnership shown and the income of business of such firm and relation to the proprietary business, it was submitted by the ld. AR that the assessee is a partner in two firms and this has also been mentioned in the computation of the total income in which the interest on the capital is also shown in the said computation, the remuneration of the firm is also shown, profit of the partnership is also shown. It was submitted that all these have been considered by the AO when he passed the assessment order u/s.143(3) of the Act. It was submitted that all the details being available before the A .....

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