TaxTMI 
TaxTMI 
2018 (2) TMI 864
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....he attendance of the employee through attendance register." And ground no. 1(a) of Cross Objection is - "1(a) By sustaining Rs. 1,50,459/- against disallowance by AO Rs. 897073/- being claim for staff salary." 2.1. This ground relates to common issue, i.e, deletion of addition under the head salary amounting to Rs. 7,46,614/- and confirming the addition of Rs. 1,50,459/. Briefly stated facts are that the assessee company during the relevant assessment year debited a sum of Rs. 13,41,079/- under the head "salary to staff", which included salary for temporary staff, trainee staff, apprentice staff etc. During the course of assessment proceedings, the AO called for the details of staff and on verification he found that the claim of salary was not supported with proof of payment of P F, ESI, proof of identity or proof of address in respect of the staff. He, therefore, disallowed payment to the extent of Rs. 8,97,073/- against the claim of Rs. 13,41,079/-. On appeal, the Ld. CIT(A) gave partial relief to the assessee to the tune of Rs. 7,46,614/- and confirmed the addition to the extent of Rs. 1,50,459/- by observing that the claim of the assessee company to have paid Rs. 1,50,459/- t....
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....staff that only 43 nos of staff are working at present, while there might have been increase of the magnitude of the assessee's business activity. The assessee could furnish address of another 10 staff but on perusal of the details filed it is found that one Sri Javed Ali of 39, Free School Street, Kolkata - 16 is still working while in the first submission he has been shown as 'left'. Therefore, there are discrepancies in the own statements filed by the assessee from time to time. It has been claimed in the submission dt. 14.11.2011 that the payments to other staff were made through vouchers. It is not acceptable that Attendance Registers have not been maintained for all staff. On the contrary, the average number as computed i.e. 24.5 is the acceptable figure as at present only 43 nos. of staff are working. It is also surprising to note that for keeping this number of staff the assessee claims that PF and ESI are not applicable. It has also been observed that some staff found in the list of Advances given, are not found in the list of staff given in the details of salary. The matter was informed to the A/R during hearing on 16.11.2011 and in response, it was submitted ....
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....ad debts, commission amounting to Rs. 3,14,392/-. Briefly stated facts are that the assessee claimed bad debt written off amounting to Rs. 3,14,392/-. The AO disallowed the same for the reason that assessee had not specifically claimed in the return that it is bad debt written off but the assessee clubbed it along with the Misc. expenses, and also that notices sent by the AO to those debtors had been returned unserved with the remark 'Not Known', therefore, according to AO, the assessee did not have any business relation with those parties in the past. On appeal, the Ld. CIT(A) deleted the addition of Rs. 3,14,392/- by observing as under: "I have considered the findings of the Assessing Officer, the submissions of the appellant and perused material placed on record. The fact that the claim of bad debt was included under the head "miscellaneous expenses" debited in the profit and loss account did not make the claim by itself invalid, particularly when the claim is reflected in the audited statements of account and the details furnished by the appellant during the course of assessment proceedings. Bad debit is allowable as deduction under section 36(1) (vii) only if it is written o....
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....e debts written off were included in sales in earlier years. Since these debts were unrealizable, the bad debts in the name of Sukant Motors of Rs. 33,428/-, Mohima Motors of Rs. 51,489/- and Mobike Point of Rs. 2,29,475/- which were shown by the assessee as sales in the earlier years were written off as the assessee company felt that the said amount is unrealizable. The AO has made the disallowance merely on the basis that the Postal Department has returned the notice issued to them with the remarks that 'Not Known' which action we don't countenance. We note that the Ld. CIT(A) has appreciated the facts in the right perspective and therefore rightly deleted the addition of Rs. 3,14,392/- since the bad debt is an allowable deduction u/s. 36(1)(vii) of the Act. Once the assessee has written off the bad debt as irrecoverable in its books in the previous year in which claim of deduction is made, then the amount written off as irrecoverable in the accounts of the assessee for the previous year in question has to be allowed. We note that these debts were included in sales in earlier years and, therefore, relying on the decision of the Apex Court in the case of TRF Ltd. Vs. CIT (2010) 19....
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....its sister concern? The AO asked the assessee to explain the aforesaid queries and gave another opportunity, but according to the AO, it could not explain to the satisfaction the plausible reason for drawing loan and the assessee failed to give reasons for not incorporating the said transactions under clause 24(a) and 18 of the Tax Audit Report. In view of the above, the submission of the assessee was not found acceptable to AO and he disallowed the sum of Rs. 1,91,641/- as not related to the business activity of the assessee and added back the same to the total income of the assessee. Aggrieved, assessee preferred appeal before the Ld. CIT(A), who while deleting the addition has observed as under: "I have considered the submissions and also perused the material placed on record. The genuineness of the borrowing and interest payment have not been doubted by the Assessing Officer as he has verified end confirmed the same from the Assessing Officer of Todi Investors i. e. Income Tax Officer-ward 31 (4), Kolkata. The Assessing Officer has apparently made the disallowance on the ground of failure on the part of the appellant to specify the use of the borrowed capital. He has not foun....
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....ustaining Rs. 129563/- against claim of Rs. 3,54,336/- disallowed by AO towards incentives and discounts." 5.2. This ground of revenue relates to deletion of addition of Rs. 3,54,336/- on the ground of incentive and discount and the assessee has challenged the addition of Rs. 1,29,563/-. Briefly stated facts are that the AO made the disallowance for lack of material evidence and for failure on the part of the assessee to deduct tax at source. According to the AO, the disallowance was comprised of on two counts i.e. total discount deducted in bills Rs. 3,44,758/- on which TDS is not applicable and Rs. 9,578/- being incentive on which also TDS was not deducted. On appeal, the Ld. CIT(A) observed that since assessee's own admission, TDS has not been made on incentive payments made to dealers to the extent of Rs. 1,29,563/- this amount is liable to be disallowed and taxed u/s. 40(a)(ia) of the Act and accordingly he directed the AO to add back this amount as disallowance u/s. 40(a)(ia) of the Act while giving effect to this order and, therefore, the assessee got relief of Rs. 2,24,773/- on this ground. Aggrieved, the revenue is in appeal against the relief granted by the Ld. CIT(A) a....
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....advance from customers amounting to Rs. 20,50,555/- in violation of Rule 46A of the I. T. Rules. Briefly stated facts are that during the course of assessment proceedings the AO noted that the assessee has shown advance from customers to the extent of Rs. 69,67,170/-. The AO, therefore, required the assessee to furnish complete details of the advances and addresses of the persons who had deposited the advances. In reply the assessee furnished complete list of advances, but could not furnish complete address of few parties. Thereafter, the AO sent notice u/s. 133(6) of the Act to few customers which were returned unserved. Therefore, the AO made addition u/s. 68 of the Act to the tune of Rs. 66,36,099/- to the total income of the assessee and allowed only Rs. 3,31,071/- in respect to which the assessee furnished documentary evidence for advances it received. On appeal, the Ld. CIT(A) following the decision of ITAT, Delhi Bench in the case of ITO Vs. Super Chemicals Distributors 1 SOT 102 and deleted the addition of Rs. 66,36,099/- as made by the AO on account of unexplained advance from customer u/s. 68 of the Act. Aggrieved, the revenue is in appeal before us. 6.2. We have heard r....
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....bills were made directly in the customers' name of those who comes directly to the show room of the assessee whereas in the case of customers to whom notices were issued by the AO u/s. 133(6) of the Act namely against Shri Abhijit Ghosh, Shri Swapan Samanta and Shri Mithun Ghosh were not retail customers but who were introduced by M/s. Banik Motors and Shiva Wheels Pvt. Ltd. with respect to Shri Swapan Samanta and Shri Durgapada Halder were introduced by M/s. Suprava Auto Centre. The advances appearing in the name of these four persons were Rs. 57,280/-, Rs. 57,280/-, Rs. 57,353 and Rs. 57,280/- and it was further explained that as per the details submitted about the advance from customers list, those advances got adjusted against the assessee's invoice in the next year. These facts have not been found to have been incorrect by the AO and the Ld. CIT(A) has found that the amounts in advance were received by the assessee either through sub-dealers or through agents or directly is supported with complete details. The Ld. CIT(A) has made a finding that Rs. 5,50,689/- was the opening balance in this account has been duly explained from the ledger account and that major part of the bala....
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....e where the appellant had made payments made through agents to get the motor cycles and scooters registered with the transport authorities. The fact that the dealers are constrained to other some incentives in the form of free registration to customers to boost the sales. However, payment to agents for other services are not supported with proper vouchers. Having regard to the facts, I consider it reasonable to restrict the disallowance to 20% of the expenses, which works out to R.89,303/-. The appellant gets a relief of R.3,57,215/- on this ground." Aggrieved, revenue is in appeal against deletion of Rs. 3,57,215/- and the assessee has filed this cross objection against the sustenance of disallowance of Rs. 89,303/- before us. 7.2. We have heard rival submissions and gone through the facts and circumstances of the case. The assessee had claimed to have paid Rs. 9,25,487/- towards registration expenses while it had recovered Rs. 4,78,969/- only from the customers thereby claiming loss of Rs. 4,46,518/- from the said transactions. The assessee claimed to have registration expenses from its own coffers at the time of selling of vehicles which according to the AO, was an expenditur....
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....n account of repair and maintenance. Briefly stated facts are that, according to AO, the assessee claimed expenditure towards repair and maintenance to the tune of Rs. 59,920/-. The AO asked to assessee to file supporting details for which the assessee filed a proforma invoice issued by M/s. Vinab Marketing Udyog. The AO took note of the fact that tax was not deducted on the payment of the said amount of Rs. 59,920/- which, according to him, attracted section 194C of the Act. Hence, the AO found the assessee in default of not deducting TDS u/s. 194C of the Act and disallowed the amount of Rs. 59,920/- u/s. 40(a)(ia) of the Act for the said default. On appeal, the Ld. CIT(A) deleted the addition by observing as under: "I have carefully considered the facts of the case and the submissions put forth on behalf of the appellant. From the copies of ledger accounts and material placed on record, I find that the appellant company had debited payment of Rs. 29,920/- only during the financial year relevant for the Assessment Year under consideration. It would appear that the proforma invoice furnished by the appellant company had led to the finding by the Assessing Officer. However, since ....