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of <h1>Appeal partially allowed: Salary expenses deleted, partner's capital addition upheld. Discrepancies in vouchers noted.</h1> <h3>M/s. Maruti Cable Network Versus The DCIT, Circle-5, Vadodara</h3> M/s. Maruti Cable Network Versus The DCIT, Circle-5, Vadodara - TMI Issues Involved:1. Disallowance of Salary Expenses2. Addition to Partner's Capital AccountSummary of Judgment:1. Disallowance of Salary Expenses:The assessee filed a return declaring an income of Rs. 42,78,410/- for AY 2009-10. The Assessing Officer (AO) disallowed Rs. 60,000/- in salary expenses due to lack of vouchers and salary register. The Commissioner of Income Tax (CIT) revised the order under Section 263 of the Income Tax Act, directing an addition of Rs. 2,44,000/- for salary paid in cash. Upon reassessment, the AO added Rs. 1,84,000/- instead. The CIT(A) deleted Rs. 1,00,000/- but retained Rs. 84,000/- due to discrepancies in vouchers. The Tribunal observed that the total salary claimed was Rs. 3,43,600/- against a turnover of Rs. 5,06,29,889/-. Given the smallness of the amount and lack of specific defects, the Tribunal deleted the addition of Rs. 84,000/-.2. Addition to Partner's Capital Account:The AO added Rs. 72,29,762/- to the partner's capital account, which was not fully explained. The CIT(A) deleted Rs. 12,04,000/- but retained Rs. 43,51,765/-. The Tribunal noted that Rs. 14,26,003/- was goodwill from Den Digital credited to partners' accounts without tax payment. The Tribunal upheld this addition due to lack of evidence of tax payment. For the remaining Rs. 13,55,500/- and Rs. 15,59,765/-, the Tribunal observed that the assessee failed to explain the sources of cash credits in the partners' current accounts. The Tribunal upheld these additions, finding no infirmity in the CIT(A)'s order.Conclusion:The appeal was partly allowed, deleting the addition of Rs. 84,000/- for salary expenses but upholding the addition of Rs. 43,51,765/- to the partner's capital account.
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