TaxTMI 
TaxTMI 
TaxTMI 
2016 (7) TMI 906
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.... 10,86,016/- 4. Disallowance out of various expenses Rs. 35,687/- 5. Addition on account of Keyman Insurance Rs. 2,66,774/- 3. First of all, I take the issue with regard to the addition made on account of low GP shown by the assessee. 4. The assessee's firm has filed its return of income on 28.10.2007 declaring total income at Rs. 2,13,070/-. On scrutiny of the accounts, the ld.AO found that the assessee had registered a fall in GP at the rate of 1.8%. He directed the assessee to explain the reason for decline of such GP. It was contended by the assessee that approximately 40 days of business had been lost due to flood in the city of Surat. The assessee had to destroy stock of Rs. 1,18,58,134/- as per notification issued by the Gov....
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.... inspection and under the direct control of Drug Authorities and cannot be conducted without maintaining proper stock records. The book results were corroborated by the VAT audit and these were before the A.O. It is also observed that the appellant was not required by the A.O to produce the stock records and therefore it cannot be held against him. Merely because the G.P. ratio has decreased, books cannot be rejected. Books of accounts can be rejected only if specific discrepancies are observed and this remains unreconciled. In the case of the appellant, the method of accounting as accepted in previous years by the Department has been followed and no specific discrepancies have been pointed out by the A.O and therefore there was no reason f....
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.... that they fall within the ambit of section 40A(2) of the Income Tax Act. According to the AO, the commission given to them is on the higher side. On appeal, the ld.CIT(A) has deleted the disallowance. 7. Before me, the ld.counsel for the assessee contended that all the persons to whom commission was paid were born before 1983. They are major. They are graduates and they were assisting the business of the assessee. In the last year, such disallowance was deleted by the ld.CIT(A), and the Revenue did not prefer any appeal. 8. On the other hand, ld.DR relied upon the order of the AO. 9. I have duly considered rival contentions and gone through the record carefully. Section 40A(2)(b) contemplates that if persons by virtue of their relations....
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....onclusion of the AO on the ground that, if this type of plea is being accepted, then, there could not be any loss to any concern. The acceptance of the insurance company could not be a guiding factory for gauging the loss of any assessee. After taking into consideration the finding of the CIT(A), I do not find any reason to interfere in it. 12. In the next ground of appeal, the grievance of the Revenue is that the ld.CIT(A) has erred in deleting the addition of Rs. 35,687 /-. 13. The ld.AO has made disallowance out of miscellaneous expenses at the rate of 20%. On appeal, the ld.CIT(A) deleted such disallowance on the ground that misc. expenses claimed by the assessee are only 0.16% of the turnover. In other words, the ld.CIT(A) was satisf....
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....his appeal is whether the Tribunal below committed substantial error of law in holding the the premium paid for the partners under the Keyman Insurance Policy was a revenue expenditure deductible under Section 37 of the Income Tax Act. 4. In order to appreciate the aforesaid question, it would be profitable to refer to the provisions contained in Section 10(10D) of the Act, which are quoted below : "10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included - (1) to (10CC) .. ... ... ... ... (10D) any sum received under a life insurance policy, including the sum allocated by way of bonus on such policy, other than (a) any sum received under ....