TaxTMI 
TaxTMI 
TaxTMI 
2014 (9) TMI 162
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....l) has wrongly confirmed addition amounting to Rs. 981548 on account of being Non Business Expenditure without appreciating the facts that all expenses were incurred through credit cards & in ordinary course of business. 3. That the Learned Commissioner of Income Tax (Appeal) has wrongly confirmed the disallowance amount of 12235474 /-under section 40(a)(ia) without appreciating the facts that the provisions of TDS are not applicable & also failed to appreciate the fact that the appellant has actually paid the expenses & nothing is payable as on 31-03 - 2005& therefore provisions of section 40(a)(ia) of Act are not attracted in appellant case. 4. That the Learned Commissioner of Income Tax (Appeal) has wrongly confirmed the disallowance amount of 25500/-paid to Registrar of companies for increasing Authorised capital of Company. 5. That the Learned Commissioner of Income Tax (Appeal) has wrongly confirmed the disallowance amount of 62852/-under section 40A(3) of Act. 6. That the Learned Commissioner of Income Tax (Appeal) has wrongly confirmed the disallowance of depreciation & interest amounting to Rs. 554349 on purchase of machinery of Rs. 1975000/-without appreciating the fa....
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....also took into consideration the non production of certain invoices and tabulated the same at Rs. 9,76,396/ -. Further the Assessing Officer also tabulated the details which as per him were mixed in nature i.e. personal expenditure of the Directors or for the business purpose and totaled the same at Rs. 1,50,238/-. The Assessing Officer allowed 20% of the said expenditure as business expenditure and remaining amount was treated as non business expenditure. The Assessing Officer allowed the expenditure of Rs. 7,07,655/ -and disallowed the total expenditure of Rs. 9,81,548/ -as per paras 2.3 and 2.4 of the assessment order. 6. The CIT (Appeals) upheld the order of the Assessing Officer as the assessee had failed to produce any documentary evidence in support of his claim that the expenditure was business expenditure. 7. Shri Ajay Jain appeared for the assessee and Shri Aakarshan Singh put in appearance on behalf of the Revenue and put forward their contentions. 8. We have heard the rival contentions and perused the record. The perusal of the assessment order reflects the Assessing Officer to have considered complete evidence of credit cards payments produced by the assessee. Howev....
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....sing Officer observed as under: (a) The details on the basis of credit card statements given by the banks has been prepared and is enclosed as annexure A-1 to this order. Total payments made through credit card are summarized as follows: - TABLE A B C Card Amount as per Credit Card Statement Amount as per assessee Diff. * Amount HSBC 1,51,297 1,78,370 27,073 City Bank 7,04,624 6,36,107 ** Standard Chartered Bank 62,775 92,775 30,000 ICICI Bank 1,44,043 1 ,42,448 ** American Express 2,65,385 3,73,800 1,08,415 SB! Credit Card 3,01,629 2,65,703 ** Total 16,29,755 16,89,2037 1,65,488 *Diff. amount is the amount for which credit card statements were not produced but amount reflected in books as expenses. So the amount given by assessee is adopted as such and amount of Rs. 1,65,488/-is treated as 'not allowed' category. **Amount shown in statement is more than that shown by assessee by Rs. 1,06,038/ (b)In the annexure, the transactions against which 'allowed' is mentioned in 'Remarks' column are treated as business expenditure, as the transactions relate to the business activity of the assessee. The total amount is Rs....
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....ion of Rs. 9,81,548/-. The ground of appeal No.2 raised by assessee is dismissed. 11. The issue in ground No.3 raised by the assessee is against disallowance made under section 40(a)(ia) of the Act. The Assessing Officer on the perusal of the details noted that the assessee had neither deducted tax at source in accordance with the provisions of Chapter -XVII -B of the Act, nor it was deposited within the time frame as prescribed under he provisions of section 200 of the Act. The assessee was asked to furnish details of payments on which tax was deducted at source and also to explain as to why the provisions of section 40(a)(ia) of the Act should not be invoked to disallow such expenditure debited to the Profit & Loss Account. The assessee was also asked to furnish breakup of payments on which tax was required to be deducted but actually not deducted by the assessee. After considering the details furnished by the assessee the Assessing Officer computed the disallowance under section 40(a)(ia) of the Act as per para 3.1 of the assessment order on the payments of Rs. 1.43 crores. Under para 3.2 of the assessment order the Assessing Officer has computed the bills of payments on which ....
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....rovisions, as amended by the Finance Act, 2010, are clear and free from any ambiguity and doubt. They clearly support the view that the expression "said due date " used in clause (A) of the proviso to the unamended section refers to the time specified in section 139(1) of the Act. The amended section 40(a)(ia) expands and further liberalises the statute when it stipulates that deductions made in the first eleven months of the previous year but paid before the due date of filing of the return, will constitute sufficient compliance." 16. In the facts of the present case the first aspect of the issue of non deduction of tax at source was the payments to doctors, faculty, in respect of advertisement, contractor and professional as referred to by the Assessing Officer in para 3.1 at page 6 of the assessment order. The assessee during course of hearing had furnished on record tabulated period -wise chart in respect of the aforesaid payments to doctors and faculty, payments on account of advertisement, contactor and professionals alongwith evidence of deposit of tax at source. The complete payments on which tax was deducted by the assessee from time to time was deposited before the due d....
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....company. The expenditure having been incurred in the capital field is the capital expenditure in the hands of the assessee and is not allowable as revenue expenditure in the hands of the assessee. We find support from the ratio laid down by the Hon 'ble Supreme Court in Brook Bond India Ltd. Vs. CIT [225 ITR 798 (SC)] wherein it has been held thatExpenditure incurred by a company in connection with issue of shares, with a view to increase its share capital, is directly related to the expansion of the capital base of the company, and is capital expenditure, even though it may incidentally help in the business of the company and in the profit - making. We uphold the disallowance of Rs. 25,500/ -. The ground of appeal No.4 raised by the assessee is dismissed. 19. The issue in ground No.5 raised by the assessee is against disallowance made under section 40A(3) of the Act. The Assessing Officer during the course of assessment proceedings noted that the assessee had made cash payments of Rs. 78,433/ -and Rs. 1,35,828/ -to its Directors on 31.3.2005. The explanation of the assessee was that the said payments were made on account of Directors 'remuneration on 31.3.2005 and the pay....
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....is allowed for statistical purposes. 22. The ground Nos.6 and 7 are not pressed by the assessee and the same are dismissed as not pressed. 23. The issue in ground No.8 is against the employees contribution towards PF account. The learned A.R. for the assessee pointed out that the issue stand covered by the order of the Hon 'ble Punjab & Haryana High Court in CIT Vs. Nuchem Ltd. in ITA No.323 of 2009 - date of decision 2.2.2010. 24. We find that the issue is squarely covered by the ratio laid down by the Hon'ble Punjab & Haryana High Court in CIT Vs. Nuchem Ltd. (supra) and in case the employees contribution toward PF account is paid before filing of the return, then no disallowance is warranted. The Assessing Officer is directed to verify the claim of the assessee and recompute the disallowance, if any. The ground of appeal No.8 raised by the assessee is allowed for statistical purposes. 25. The issue in ground No.9 raised by the assessee is against estimated addition of Rs. 21,75,771/ -out of commission paid to doctors. 26. During the course of assessment proceedings, the statement of Shri Satinder Kumar Sharma, Accountant was recorded on 16.11.2007 under section 131 ....
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....te submission made by the assessee, the Assessing Officer observed that the assessee indirectly admitted that the quantum of such payment of commission was covered by the quantum of bogus purchases which were to the tune of Rs. 38,10,500/ -. It may be brought on record that though the assessee had raised the ground of appeal Nos.6 and 7 in relation to the bogus purchases but the same were not pressed by the assessee. In the totality of the above said facts and circumstances, we are in conformity with the orders of the authorities below that the disallowance on account of commission paid to the doctors for referring the patients to the hospital are to be added as income in the hands of the assessee in view of the provisions of section 69C of the Act. However, we restrict the said addition to Rs. 5 lacs for the year under consideration. The ground of appeal No.9 raised by the assessee is thus partly allowed. ITA No.410/Chd/2010 :: Assessment year 2006 -07 : 30. The assessee in ITA No.410/Chd/2010 has raised the following grounds of appeal: "1. That the order of Learned C.I.T. (A) is bad and against the facts & Law. 2. That the Learned Commissioner of Income Tax (Appeal) has wrong....