Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram
Income Tax - Highlights / Catch Notes

Home Highlights October 2024 Year 2024 This

Disallowance of contingency expenses claimed by the assessee. ...


Tax Tribunal allows contingency expenses recorded in books against Cost to Completion report.

Case Laws     Income Tax

October 30, 2024

Disallowance of contingency expenses claimed by the assessee. The Assessing Officer (AO) disallowed the contingency expenses despite acknowledging that the total cost figure in the Cost to Completion (CTC) report matched the total cost figure in the books of accounts. The Tribunal held that the contingency expenditure, though initially budgeted, is eventually recorded in the books of accounts as actual expenditure. The Tribunal observed that the AO himself admitted that the total cost figure in the CTC report matched the total cost figure in the books of accounts. Since the contingency figures were recorded against the total expenditure, it is illogical to assume that the assessee booked bogus expenditure and generated cash outflow. The Tribunal emphasized that in survey operations, the onus is on the revenue authorities to provide cogent evidence that the assessee incurred expenses not recorded in the books of accounts. As the impugned expenditure was found recorded in the regular books of accounts, the allegation of non-compliance with Standard Operating Procedure (SOP) is irrelevant. The Tribunal directed the AO to delete the additions from the captioned appeals.

View Source

 


 

You may also like:

  1. Valuation- inter-connected undertaking - related parties or not - applicability of doctrine of mutuality of interest - The fact that Appellant 1 and Appellant 2 were not...

  2. Valuation by DVO - addition based on estimated cost disregarding actual cost as per books - applicability of section 142A before amendment - non-rejection of books - AO...

  3. The case pertains to the disallowance of deduction claimed u/s 80IA by an assessee operating two units, one for paper manufacturing and another for power generation. The...

  4. Reference to the DVO does not become invalid on the completion of the assessment proceedings before the receipt of the valuation report and that after the receipt of the...

  5. Disallowance of interest and financial expenses was not justified as the appellant paid interest and financial expenses to State Bank of India, Overseas Branch,...

  6. Addition under the head of Vehicle Running Expenses and Repairs & Maintenance - "exaggerated expense' or "not reasonable expense". - The onus is on the Revenue to...

  7. Penalty levied u/s 271B - tax audit report - In our view, strained relationship with the earlier CA would constitute reasonable cause. The tax authorities have pointed...

  8. The Income Tax Appellate Tribunal examined the determination of net profits from contract business, rejection of books of accounts, and addition u/s 40(a)(ia) for...

  9. Valuation - Captive Consumption of goods by the sister concern - expenses to be included in the cost of production - Determination of Cost Plus 10% - Rule 8 - The issue...

  10. Nature of expenses - Relaunch expenses - deferred revenue expenditure claimed to the extent of 1/3rd in each of the year -The tribunal disagreed with the AO's...

  11. The tribunal held that the amounts received by the appellant for reimbursement of medical expenses, dog squad maintenance costs, and expenses incurred for celebrating...

  12. Rectification of a mistake apparent from the record u/s 154 of the Income Tax Act. The assessee had provided specific details and facts regarding the nature of alleged...

  13. The Appellate Tribunal considered a case where disallowance of Gratuity u/s 43B was made due to a discrepancy in classification in the Income Tax Return and tax audit...

  14. When the Tribunal has recorded a finding that the expenses relating to obtaining fixed deposits are closely linked with the business requirement of the assessee, such...

  15. The Appellate Tribunal considered the disallowance of club expenses to determine if they were incurred for business purposes. It held that the Assessing Officer's...

 

Quick Updates:Latest Updates