TaxTMI 
TaxTMI 
2017 (9) TMI 1020
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....Rule 46A of the Income Tax Rule, 1962. II. Without prejudice to the above on Merits 2. Addition u/s. 68 of Rs. 10,00,000/- 2.1 The learned CIT(A) erred in confirming the order of the Assessing Officer towards Addition u/s. 68 of Rs. 10,00,000/- based on the Information received on AIR database. Without appreciating that the said cash deposits were duly reflected in books of accounts and the books of accounts were dully audited under the provisions of Companies Act as well as Income Tax Act. The said books of accounts were dully verified by the A.O., Hence, the Addition Confirmed by the CIT(A) may be deleted. 3. Addition u/s. 40A(2)b) of Rs. 16,23,034/- 3.1 The learned CIT(A) erred in confirming the order of the Assessing Officer on the issue of disallowance of Rs. 12,15,000/- u/s. 40A(2)(b), without appreciating that there was an increased in remuneration paid to the Directors who were the Key Persons of the Company and the said remuneration was increased as per the resolution passed by the company and on the basis of G.P. percentage of the Company, therefore disallowance made was not justified. Hence, the disallowance confirmed may be d....
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....arties and perused the record. In our view this ground of appeal needs no specific adjudication and the same would be taken care while discussing the other grounds of appeal. 5. Ground No.2 relates to confirming the addition of Rs. 10.00 Lakhs under section 68 of the Act. The learned AR of the assessee argued that on the basis of AIR information, the assessing officer issued notice to the assessee under section 143(2) and further issued notice under section 142(1). In response to those notices of the assessing officer, the assessee furnished is its reply along with the cashbook and details of deposits on the 15th Nov 2010 and further on 12 Jan 2011 in its bank account with Tamil Nadu Mercantile Bank Ltd. Along with the reply the assessee furnished day-to-day cashbook summary. However, the assessing officer in its order observed that assessee has not submitted cashbook for verification and held that the cash deposits were unexplained. Before Commissioner (Appeals) the assessee furnished written submission dated 21 July 2014 along with cashbook. The learned Commissioner (Appeals) remanded the written submission and the cashbook for verification to the assessing officer. The assess....
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.... were deposited out of cash balance in hand. The similar contention was urged before the ld. CIT(A). The assessee in addition to its contention furnished the cash book to substantiate their contention. The ld. CIT(A) called the remand report of AO on furnishing complete books of account. The AO furnished his remand report dated 28.11.2014. In the remand report, the AO contended that a cash book was produced for the first time before the first appellate proceeding which construed the fresh evidence. In the objection to the remand report, the assessee contended that the cash book was submitted before the Assessing Officer during the assessment proceeding. The ld. CIT(A) instead of examining the cash book relied upon the remand report of the AO and rejected the contention of assessee. 7. We have seen that the assessee has furnished copy of cash book before us showing the deposit of Rs. 5,00,000/- on 15.11.2010 and further Rs. 5,00,000/- on 12.01.2011 with Tamilnad Bank (P) Ltd. We have seen that the assessee filed detailed reply before the AO along with cash book (page 76 to 82 of PB) and again before the ld. CIT(A) vide submission dated 21st July 2014 (page 72 to 75 of PB). From t....
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....arties and have gone through the orders of authorities below. During the assessment proceeding, the AO noticed that there is substantial increase in the Director's remuneration during the year comparative to the earlier years. The Director's remuneration in FY 2009-10 were Rs. 27,00,000/- which were increased to Rs. 43,20,000/-. In the reply to the queries during the assessment proceeding, the assessee contended that there is substantial expansion of production facility in last year; the Directors were required to visit the Tarapur Factory frequently. Thus, the remuneration of five Directors was increased. The assessee-company passed resolution to in the Annual General Meeting (AGM) of the Board of Directors. The contention of assessee was not accepted by AO and the increase in Director's remuneration was restricted to 15% over the preceding year. Thus, the AO disallowed a difference of Rs. 12,15,000/- u/s 40A(2)(a) of the Act. The ld. CIT(A) confirmed the disallowance holding that the assessee was bound to submit the details of expansion along with documentary evidence in the form of copy of Resolution of Board for increasing the remuneration of Directors. We may note that the que....