2019 (1) TMI 1456 - AT - Income Tax

Assessee's Appeal Succeeds on Various Grounds for AY 2010-11

Nikhil Chandra Mitra Versus Income Tax Officer, Ward-49 (4), Kolkata

Nikhil Chandra Mitra Versus Income Tax Officer, Ward-49 (4), Kolkata - TMI Issues Involved:Appeal against order of CIT(A) for AY 2010-11 on various grounds including addition of discounts, alleged bogus purchases, transportation charges, staff welfare expenses, and accounting charges.Analysis:Ground No. 1 - Addition of Discount:The Assessing Officer added Rs. 1,14,720 on account of alleged discount received from a company. The CIT(A) confirmed the addition as the assessee failed to prove the cash payments with documentary evidence. The Tribunal found no infirmity and dismissed this ground.Ground No. 4 - Unreconciled Closing Balance:An addition of Rs. 7,99,800 was made for an unreconciled closing stock balance. The Tribunal set aside the matter to the Assessing Officer for fresh adjudication as the contention regarding cash withdrawal and non-entry in the cash book was not raised before lower authorities.Ground Nos. 6 & 15 - Disallowance under Section 40(a)(ia):The Tribunal set aside these grounds to the Assessing Officer for applying a judgment regarding the retrospective nature of the second proviso to Section 40(a)(ia).Ground No. 7 - Disallowance of Staff Welfare Expenses:The disallowance of Rs. 1,50,000 under staff welfare expenses was upheld as the assessee failed to provide evidence for the payment made to a local politician.Ground No. 8 - Disallowance of Staff Welfare Expenses:This ground was dismissed as not pressed due to the smallness of the amount.Ground No. 9 - Disallowance of Bogus Purchase of Diesel:The Tribunal admitted additional evidence filed by the assessee and set aside the matter to the Assessing Officer for fresh adjudication due to lack of opportunity to clarify matters before the CIT(A).Ground No. 10 - Disallowance of Payments for Diesel:The disallowance of Rs. 4,50,000 made for payments to a specific individual for diesel purchase was upheld due to lack of evidence.Ground No. 11 - Disallowance of Accounting Charges:The disallowance made under Section 40(a)(ia) for accounting charges was deleted as the person paid was not a qualified professional.Ground No. 13 - Gross Profits Issue:The Tribunal directed the Assessing Officer to adopt a gross profit rate of 3.5% instead of 5% as adopted by the CIT(A).In conclusion, the appeal of the assessee was allowed in part by the Tribunal on various grounds.This detailed analysis covers the issues raised in the appeal and the Tribunal's findings on each ground, providing a comprehensive understanding of the judgment.