TaxTMI 
TaxTMI 
2017 (2) TMI 548
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....of the case, the Ld. C.LT.(A) was wrong in dittoing the order of the A.O. and confirming the addition u/ s. 40a(ia) of the Income Tax Act amounting to Rs. 439,560/- as non- deduction on professional fees which is completely arbitrary, unjustified and illegal. 4. For that on the facts of the case, the Ld. CIT(A) should have consider the facts that the assessee was not liable to deduct TDS under any provisions of the Income Tax Act, therefore, no disallowance u/s. 40(a)(ia) should have been made by the A.O. and sustained by the Ld. CIT(A) amounting to Rs. 439,560/- which is completely arbitrary, unjustified and illegal. 5. For that on the facts of the case, the Ld CIT(A) was wrong in adding payments already made to junior Doctors from Ripon Nursing Home under section 40(a)(ia), although section 40(a)(ia) is only applicable to amount payable, therefore, the whole addition is completely arbitrary, unjustified and illegal. 6. For that on the facts of the case, the Ld. C.LT.(A) was wrong in dittoing the order of the A.O. and confirming the addition u/ s. 41(1) of the Income Tax Act amounting to Rs. 656,835/- as cessation of liability which is completely arbitrary, unjustified and i....
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....ore us, which are discussed here in below. 3. First issue raised by assessee in this appeal in ground No.2 is that Ld. CIT(A) erred in confirming the order of AO by sustaining the disallowance of Rs.3,89,550/- u/s 69A of the Act. 4. The assessee in the year under consideration has introduced capital in the form of cash on 01.04.2007 in his capital account. On question by AO about source of capital introduction, the assessee submitted that it is arising out of past savings of 22 years. He further submitted that the aforesaid amount has been shown in the personal statement of balance sheet. However, AO disregarded the plea of assessee by observing that:- a) The drawing from the balance-sheet of assessee is not reflecting. b) There was no point to keep such huge money for such a long time in the form of cash though assessee is maintaining personal bank account. c) Assessing Officer also observed that assessee has also introduced cash as capital in his firm in the earlier years; In view of the above, Assessing Officer disallowed the same u/s 69A of the Act and added the introduction of cash of Rs.3,89,550/- to the total income. 5. Aggrieved, assessee preferred an appeal before L....
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....assessee has shown the drawings in the earlier years as under : 1. 2002-03 No information 2. 2003-4 Rs. 1,32,263.00 3. 2004-05 Rs. 1,79,145.00 4. 2005-06 Rs.10,32,676.00 5. 2006-07 Rs. 2,44,087.00 From the above, it is clear that the assessee has withdrawn and introduced the capital in the earlier years. On verification of the drawing and capital introduction, we find that there was hardly any surplus fund available to the assessee for infusion of fresh capital. The assessee must also be spending money on actual personal expenses. In view of above we are of the view that the assessee failed to explain the sources of cash with supporting evidence. Therefore the ground of appeal of the assessee is dismissed. 8. Next issue raised by assessee in this appeal in grounds No. 3 to 5 is that Ld. CIT(A) erred in confirming the order of AO by sustaining the addition of Rs.4,39,560/- u/s 40(a)(ia) of the Act. 9. The assessee, in the year under consideration has claimed certain expenditures towards the payment of several doctors amounting to Rs.4,39,560/-. On such payment the assessee did not deduct any TDS u/s 194J of the Act. On question by AO for nondeduction ....
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....ities Below on account of non-deduction of TDS u/s. 194J of the Act. To this issue, argument placed by Ld. AR for the assessee before us was that the gross receipt of assessee in the immediate proceeding financial year was less than as prescribed limit u/s 44AB of the Act. However on perusal of the submission of the assessee we find that the assessee has shown income from two sources (1) medical professional receipts (2) Nursing home receipts. The receipts from both the sources are of Rs. 14,34,833/- only in the immediate preceding financial year 2006-07. In our view for the applicability of the provisions of section 44AB of the Act and 194J of the Act, the gross receipts from both the sources shall be clubbed. Accordingly we find that the gross receipts for the tax audit for the FY 2006-07 is of more than Rs. 10 lacs so it is clear that the assessee was liable for tax audit for the FY 2006-07, consequently the TDS provisions will be applied for the year under consideration. Hence the assessee has defaulted in the TDS deduction on the professional payment to doctors, therefore the deduction for the same shall not be allowed. Hence the ground of appeal of the assessee is hereby dism....
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.... is sustained." Aggrieved by this, assessee has come up in appeal before us. 16. Before us Ld. AR submitted that the liabilities were not written off in the books of account assessee and therefore same cannot be held as ceased to exist. Ld. AR for assessee in support of assessee's claim drew our attention on page 68 of the paper book where the Schedule-C of the balance-sheet of the assessee was placed showing the amount of sundry creditors. On the other hand, Ld. DR vehemently supported the order of Authorities Below. 17. We have heard the rival contentions of both the parties and perused the materials available on record. We find that the liability ceased to exist if it is written off by assessee in its books of account. In case on hand we find that the liability is very much reflecting in the balance-sheet of assessee. Therefore the same cannot be added under the provisions of section 41(1) of the Act. Hence this ground of appeal of the assessee is allowed. 18. Next issue raised by assessee in this appeal is that Ld. CIT(A) erred in confirming the order of AO by sustaining the addition of Rs. 84,000/- u/s 23(4)(b) of the Act. 19. Assessee is owner of two individual properti....
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.... assessee for the purpose of rest when the assessee is tired after performing tedious professional duties for which third floor cannot be said to be used for the purpose of his residence purpose. On the other hand, Ld. DR vehemently relied on the order of Authorities Below. 22. We have heard rival contentions of both the parties and perused the materials available on record. At the outset we find that the learned AR has not brought anything on record to demonstrate that the flat at high land park is used for the purpose of assessee residence. In the absence of any documentary evidence we find no infirmity in the order of ld. CIT(A). Hence this ground of appeal of the assessee is dismissed. 23. Next issue raised by assessee in Ground No.8 is that Ld. CIT(A) erred in confirming the order of AO by sustaining of Rs.38,940/- on account of non-availability of supporting evidence. 24. Assessee for the year under consideration has claimed expenditure on rates and taxes for Rs.38,940/- but failed to produce supporting evidence. Therefore, AO has disallowed the same and added to the total income of assessee. 25. Aggrieved, assessee preferred an appeal before Ld. CIT(A) whereas assessee s....
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....he order of AO by sustaining the disallowance of Rs.22,996/- on account of non-availability of supporting evidence in assessee's profit and loss account for the year ended on 31.03.2008. The assessee has claimed following expenditure:- Sl.No Head of expenditure Amount 1 Doctor's refreshment 46,890 2 General charges 25,524 3 Accounting charges 18,000 4 General charges 12,564 5 Accounting charges 12,000 1,14,978 At the time of assessment proceedings, assessee submitted ledger copy of the aforesaid expenditures but failed to provide supporting evidence in support of his claim. Assessing Officer also observed that the payment for the aforesaid expenditure has been made through cash and only self-made vouchers have been maintained. Accordingly, AO has disallowed 20% of the aforesaid expenses and added a sum of Rs.22,996/- to the total income of assessee. 29. Aggrieved, assessee preferred an appeal before Ld. CIT(A) whereas assessee submitted that AO has disallowed the expenditure on ad hoc basis. The assessee prayed to restrict the disallowance to 5% of such expenditure. However, Ld. CIT(A) disregarded the claim of assessee and confirmed the ....
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....e of Rs.28,000/- to the total income of assessee. 34. Aggrieved, assessee preferred an appeal before Ld. CIT(A) whereas assessee demonstrated that as per the agreement with HDFC bank the interest will be given on maturity and accordingly HDFC bank will deduct TDS on maturity of taxable bonds. The assessee also submitted that there would have been mismatch in the amount of interest and TDS in the year of maturity of such bonds if the interest income would have been offered to tax on year to year basis. Therefore, same will be offered in the year of maturity of taxable bonds. However, Ld. CIT(A) disregarded the claim of assessee and confirmed the order of AO by observing as under:- "The submission of the A/R, grounds of appeal and assessment order were duly considered. AO added a sum of Rs. 28,000/- on account of interest following the mercantile system of accounting. Appellant pleaded that this should e income of the year in which interest is received. On perusal of Balance Sheet of the appellant it was found that he is following mercantile system of accounting. Appellant does not have freedom to follow two system of accounting. Hence AO was right in taking interest income on merc....
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....ssessee has shown drawing in the year under consideration for 2,79,788/- only. Accordingly, AO observed that foreign travelling expense has been incurred from undisclosed source of assessee's income and he added the same to the total income of assessee. 39. Aggrieved, assessee preferred an addition appeal before Ld. CIT(A) whereas assessee submitted that the all payments towards foreign travelling expenses had been made from the disclosed bank account. Therefore, the adjudication of AO that such expenditure has been incurred from the undisclosed source is baseless and irrelevant. However, Ld. CIT(A) did not admit the additional ground of appeal filed by assessee and confirmed the order of AO by observing as under:- "Vide note sheet entry dt. 26/11/2012, the A/R was asked to file copy of additional ground taken, to file re-casted Balance Sheet showing foreign travelling etc. but no such reply was filed. A/R wanted to withdraw additional ground vide note sheet entry dt. 28/01/2013 but did not submit an reply. Since additional ground of appeal were not submitted, same are not adjudicated." Aggrieved by this, assessee has come up in appeal before us. 40. Before us Ld. AR for the ass....