TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal affirms tax assessment decisions, rejects Assessee's appeals. Order pronounced on 12-02-2019.</h1> The Tribunal upheld the additions and disallowances made by the AO and Ld. CIT(A) in the assessment, rejecting the Assessee's appeals on all grounds. The ... Suppression of closing stock - AO has made addition on account of non-disclosure of closing stock as it was not shown in column 4 of Part A, P&L in the income tax return - Held that:- AO observed that excess of assets in the shape of closing stock is his profit, which is not declared as income by the assessee. The assessee’s claim that he should get benefit of provision of deduction u/s. 80JJA of the Act is not tenable because the addition has been made on account of undisclosed closing stock of Hindustan Sanitary Plaza, and this concern dealing in sanitary items. As this income is not derived from the activity of manufacturing which is covered u/s. 80JJA, no deduction is allowable. Hence, the addition was rightly confirmed by the Ld. CIT(A), which does not need any interference Disallowance of 25% of expenses claimed under the heads consumables, power/ fuel, packing, freight, miscellaneous, telephone, conveyance, travelling etc. - no vouchers were produced for expenditure claimed - Held that:- AO has not made disallowance on adhoc basis but after giving full opportunity to the assessee who could only submit evidence of expenditure of about ₹ 8 lacs out of his claim of ₹ 54.92 lacs. In view of the facts of the case, the disallowance made by the AO was upheld. However, it was restricted to 1/10th of the expenditure not substantiated by the assessee i.e. ₹ 4,70,000/- which was disallowed and therefore, the AO was directed to compute the income accordingly, which does not need any interference on my part, therefore, uphold the order of the Ld. CIT(A) on this issue and reject the ground raised by the Assessee. - Decided against assessee. Issues:1. Addition made on account of alleged suppression of closing stock2. Denial of deduction under section 80JJA on the addition amount3. Disallowance of expenses claimed under various headsAnalysis:Issue 1: Addition made on account of alleged suppression of closing stockThe Assessee appealed against the Order of the Ld. CIT(A) regarding the addition of Rs. 14,62,636 made on account of alleged suppression of closing stock. The AO added this amount as the closing stock was not disclosed in the income tax return, resulting in less profit and income suppression. The AO considered the excess of assets in the form of closing stock as unreported profit. The Assessee claimed benefit under section 80JJA, but it was deemed untenable as the undisclosed income was not derived from the manufacturing activity covered under section 80JJA. The Tribunal upheld the Ld. CIT(A)'s decision, confirming the addition as justified and rejecting the Assessee's grounds.Issue 2: Denial of deduction under section 80JJA on the addition amountThe Assessee's alternate claim for deduction under section 80JJA on the addition of Rs. 14,62,636 was denied. The Ld. CIT(A) upheld the denial based on invalid reasons, contrary to CBDT Circular No. 37/2016. The Tribunal found that since the undisclosed income was not related to a qualifying activity under section 80JJA, the denial of the deduction was appropriate, and the claim was rejected.Issue 3: Disallowance of expenses claimed under various headsThe AO disallowed 25% of expenses claimed by the Assessee under different heads due to lack of supporting vouchers. The AO provided ample opportunity for the Assessee to substantiate the expenses, but only a portion of the claimed amount was supported by evidence. The Tribunal noted that the disallowance was not arbitrary but based on the lack of proper documentation. The disallowed amount was restricted to Rs. 4,70,000, which was upheld by the Ld. CIT(A) and deemed appropriate. Consequently, the Tribunal upheld the decision on this issue and dismissed the Assessee's appeal.In conclusion, the Tribunal upheld the additions and disallowances made by the AO and Ld. CIT(A) in the assessment, rejecting the Assessee's appeals on all grounds. The order was pronounced on 12-02-2019.
TaxTMI 
TaxTMI 
