2020 (4) TMI 906 - AT - Income Tax

ITAT Delhi Upholds CIT(A)'s Decisions, Dismisses Revenue's Appeal.

The ITAT Delhi upheld the CIT(A)'s decisions on all issues, dismissing the Revenue's appeal in its entirety. The additions on account of discrepancies in ... Difference in receipts as per the bank account of the assessee and receipts as per its books of account - Addition on account of amount credited in bank account of the assessee in excess of receipts as per' books of account and also allowing the assessee appeal against the rejection of the books of accounts of the assessee -- As per CIT-A addition is not sustainable in view of documentary evidences already available on record to substantiate the said difference and AO has failed to make any sincere effort regarding the same and made addition only on the basis of doubt, suspicion, conjecture or surmises without affording proper opportunity of being heard to the appellant which is in violation of principles of natural justice - HELD THAT:- Revenue has failed to controvert the findings of CIT(A) in this regard. We find no merit in the issue raised vide ground of appeal no. 1. Before parting, we may also point out that no additional evidence was produced before the CIT(A) and hence there is no merit in the additional ground of appeal raised by the Revenue. Difference in brokers’ accounts and party wise gross receipts - HELD THAT:- CIT(A) deleted the said addition made by the AO observing that the said difference in party wise detail and brokers’ account is due to Margin Money and STT. In view of the findings of the CIT(A) with regard to the aforesaid addition, we find no merit in the grounds of appeal no. 2 raised by the Revenue and the same is dismissed. Non deduction of TDS on professional charges - HELD THAT:- CIT(A) noted that the assessee had not claimed the said professional expenses in its profit & loss account and had capitalized the same under work in progress i.e. “Building under Construction” in fixed assets schedule. The CIT(A) thus deleted the addition. We find merit in theorder of the CIT(A) and uphold that the provisions of section 40(a)(ia) of the Act are attracted only if expenses are claimed in the profit & loss account and not when the same are capitalized. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- CIT(A) noted that the assessee had made investment only in share application money as on 31.03.2011 and hence there was no merit in invoking the provisions of section 14A of the Act. We uphold the order of CIT(A) in this regard and dismiss the ground of appeal no. 3 raised by the Revenue. Issues:1. Addition of amount credited in bank account in excess of receipts2. Addition on account of difference in brokers' account and gross receipts3. Non-deduction of TDS on professional charges4. Disallowance under section 14A of the Income Tax ActAnalysis:1. The first issue pertained to the addition of Rs. 10,20,64,174 on account of the amount credited in the bank account exceeding the receipts as per the books of accounts. The AO raised this addition based on discrepancies noted in the bank statements. However, the CIT(A) found documentary evidence to substantiate the difference and concluded that the addition was not sustainable due to lack of proper opportunity and violation of natural justice principles. The Revenue's appeal on this issue was dismissed as the findings were not contested.2. The second issue revolved around the addition of Rs. 23,02,705 due to differences in brokers' accounts and party-wise gross receipts. The CIT(A) reviewed the explanations provided by the assessee regarding these differences, attributing them to Margin Money and STT. Consequently, the CIT(A) deleted the addition, and the Revenue's appeal on this matter was dismissed as well.3. Regarding the third issue of non-deduction of TDS on professional charges amounting to Rs. 2,76,200, the CIT(A) observed that the expenses were not claimed in the profit & loss account but were capitalized under work in progress. Consequently, the CIT(A) deleted this addition, noting that section 40(a)(ia) of the Act applies only when expenses are claimed in the profit & loss account, not when capitalized.4. The final issue concerned the disallowance under section 14A of the Act. The CIT(A) found that the assessee had invested only in share application money, and therefore, the provisions of section 14A were not applicable. The CIT(A)'s decision on this matter was upheld, and the Revenue's appeal on this issue was dismissed.In conclusion, the ITAT Delhi upheld the CIT(A)'s decisions on all issues, dismissing the Revenue's appeal in its entirety.