TaxTMI 
TaxTMI 
2018 (12) TMI 749
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....4. The CIT (A) has confirmed the same on the ground that if the provisions were credited to suspense account, The TDS provisions would be applicable. It is just a case where the appellant has bring to decide the name of party in the accounts at a later point of time, when the bill is received. Such accounting practice is cannot defer the payments of TDS. Further, the Rajkot Tribunal has also confirmed such disallowance in A.Y. 2006-07. In view of this matter, CIT (A) has confirmed the same. 5. Being, aggrieved the assessee filed this appeal before the Tribunal. The learned counsel for the assessee submitted that the assessee follows mercantile system of accounting and has to book all expenses pertaining to year in which it has been incurred, all though the bill or the payment has been made in subsequent year. 6. Per contra, learned CIT (D.R.) submitted that issue is covered in favour of Revenue by the order of Tribunal for the assessment year 2006-07. Hence, CIT (A) has rightly confirmed the disallowance so made. 7. We have heard the rival submissions and perused the relevant material on record. We find that the assessee has credited amount of expenses as provisions in the....
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....erned, the same is not allowable as the expenditure is not related to plants and machinery as it was related to increase of share capital. Therefore, Ground No. 2 &3 of appeal of the assessee are dismissed. 13. Ground No. 4 relates to disallowance of foreign travelling expenses of Rs. 97,33,000/- under section 37(1) of the Act. 14. The assessee has debited foreign travelling expenses of Rs. 1,21,66,257/-. The AO examined the details of expenditure of above Rs. 1 lakhs as filed by the assessee as per chart reflected in para 6 of assessment order. On verification of the same, the AO noticed that these expenses include expenses on purchase of gift items of Rs. $10,000 from The Palace Art Co., as per bill dtd.06.06.2006. Another expenditure of Rs. $ 480 have been incurred on duty free shop for purchases of CDs and DVDs. Further, expenses of Rs. 5,20,336/- spent on pleaser trip at Four Season Multitrade Pvt. Ltd. Resort, Bali. The voucher of expenses are self-made and only certified by the directors. Considering these facts and some business connection with Gulf Countries where the assessee company has exported cement and tinker, the AO has allowed 20% expenses as fair, reasonable....
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....isallowing of gift expenses of Rs. 58,52,176/- and Diwali Gift expenses of Rs. 8,47,352/- aggregating to Rs. 66,99,528/- under section 37 (1) of the Act. The CIT(A) erred in confirming the same to the extent of Rs. 23,44,835/-. 19. Facts apropos of this ground are that the assessee has debited expenses of Rs. 58,52,176/- being gift Article expenses and Rs. 8,47,352/- being Diwali Gift in the Profit & Loss Account. On verification, the AO found that the recipient of gifts are all not those persons with whom the assessee has business transaction. Therefore, there is inherent element of personal nature involved in this kind of Gifts. The AO further, noticed that FBT expenses were meant for the benefits derived by the employees from the employer and the expenses not related to employees are cannot be considered as perquisite. In view of these facts and circumstances, the AO made disallowance of Rs. 58,52,176/- and Rs. 8,47,352/- aggregating to Rs. 66,99,528/-. 20. Being aggrieved, the assessee filed an appeal before the ld. CIT (A). The CIT (A) observed that similar disallowance were also made in A.Y. 2006-07 and CIT (A) has restricted such disallowance to 35%. This decision o....
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....unt of bad debt in the books of accounts as in respect of customers who were no longer found recoverable and same were represented very old. The details of such debtors were submitted before the CIT (A) (vide PB 11 to 14). Therefore, CIT (A) was right in deleting such disallowance by following the ratio laid down by the Hon`ble Supreme Court in the case of T. R. F. Ltd. vs. CIT [2010] 323 ITR 397(SC)/[2010] 190 Taxman 391(SC). 28. We have heard the rival submissions and perused the relevant material on record. We find that the issue is squarely covered by the decision of Hon`ble Supreme Court in the case of T. R. F. Ltd. vs. CIT [2010] 323 ITR 397(SC)/[2010] 190 Taxman 391(SC). As the assessee was not required to establish the debt become bad if it has been written off in books of accounts as irrecoverable. Therefore, we do not find any infirmity in the order of CIT (A), accordingly, same is upheld. This grounds of appeal of the Revenue is dismissed. 29. In the result, the appeal of the Revenue is dismissed. 30. In the result, the appeal of the Assessee as well as Revenue for the assessment year 2007-08 is dismissed. I.T.A.No.607/RJT/2014/A.Y. 2010-11/ by Assessee: 3....
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....der of CIT(A), accordingly, same is upheld. This ground is therefore, dismissed. 37. Ground No.2 relates to disallowance foreign travelling expenses of Rs. 25,37,807/- under section 37(1) of the Act. 38. The assessee has debited foreign travelling expenses of Rs. 25,37,807/-. The AO examined the details of expenditure of ledger account and find that the assessee has not furnished the evidence that foreign visit led to investment in business during the year. No report has been filed in respect of persons who traveled abroad and places visited by them. The voucher of expenses are selfmade and only certified by the director only. Accordingly, the assessee is disallowed the expenses of Rs. 25,37,807/- by treating the same as no business expenditure. 39. Being aggrieved, the assessee filed an appeal before the ld. CIT (A). The ld. CIT (A) confirmed the disallowance by observing that identical disallowance made in A.Y. 2006-07 were confirmed by the tribunal in the appellant`s case. The appellant has not proved that situation is different in the year under appeal. Therefore, the disallowance so made were confirmed. 40. Being, aggrieved the assessee filed this appeal before the....
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.... made on this account. 44. Being aggrieved, the assessee filed an appeal before the ld.CIT(A). Before him, it was contended that the expenditure was incurred for dealers, customers etc. and have direct connection with business and these expenditure contributed towards increase in sales during the year under appeal. However, the CIT (A) observed that expenditure has been incurred for purchaser of Kashmiri shawls, silver boxes, and T20 & Movie tickets. However, the appellant has submitted bills of purchase, but the names of beneficiaries of impugned expenses are not furnished. Therefore, the contention of the appellant that items purchased were given to the dealer's, suppliers etc. cannot be accepted at face value. It is the duty of the appellant to come out with the specific evidences to demonstrate that the expenditure claimed is related to the business. In the absence of such evidence, the claim cannot be allowed merely on the basis of averments. Since the appellant has failed to adduce necessary evidences in support of the claim of deduction of the business promotion expenses, the CIT (A) has held that the AO was justified in disallowing the same. 45. Being, aggrieved the a....
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....ribunal. The Ld. CIT (DR) relied on the order of the AO and submitted that the nature of gift expenses are such, which are not wholly and exclusively incurred for the purpose of business, hence, whole disallowances should have been confirmed. 52. Au contraire, the learned counsel for the assessee supported the order of CIT (A) who has simply followed the ITAT order. 53. We have heard the rival submissions and perused the relevant material on record. We find that this issue is covered by ground no.1 of the assessee for A.Y.2010-11 as discussed above by our order. It is seen that the expense were incurred on account of gift for the person who are not connected with the business of the assessee. Therefore, the expenses are not wholly and exclusively incurred for the purpose of business carried on by the Revenue. Further, the facts are identical and same has not been controverted by the assessee. Therefore, respectfully following decision of tribunal in assessee`s own case for the A.Y. 2006-07 dtd. 13.09.2013, we are of the view that Ld. CIT (A) was justified in restricting the disallowance to 35% of total claim. Therefore, we do not find any infirmity in the order of CIT (A),....
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....ee was unable to file any evidence to shows that it was categorized as sick Industrial undertaking and continued to be sick company. Therefore, the AO disallowed the claim of Rs. 50,60,02,295/-. Under section 115JB of the Act. 61. Being aggrieved, the assessee filed an appeal before the ld. CIT(A). The CIT (A) observed that as per outcome of BIFR order dtd. 15.02.2011, the BIFR held that net worth has turned out to be positive as on 31.03.2010 and therefore, the appellant ceased to be a sic company. Therefore, contention of the appellant that it was still sic company was not found acceptable. The CIT (A) quoted the provision of sub-clause (vii) of section 115JB and observed that commencing point and the ending point for such exclusion of profit is clearly provided. The commencing point is that year in which the company becomes a sick company and the ending point in the year in which the net worth of the company becomes equal to or exceeds the accumulated losses. In the appellant's case, the commencing point is not under dispute. What is under dispute is the ending point. On the basis of BIFR`s order as per which the net worth has become positive as on 31.03.2010, the appellant w....
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....R. He contended that benefit of deduction under clause (Vii) is available up to the year in which net worth of the assessee company becomes positive. The learned counsel for the assessee has placed reliance in the case of ACIT v. Praga Tools Ltd. 59 SOT 14 (Hyderabad). 64. We have heard the rival submissions and perused the relevant material on record. The perusal of clause (vii) of explain 1 to section 115JB reads as under: (vii) the amount of profits of sick industrial company for the assessment year commencing on and from the assessment year relevant to the previous year in which the said company has become a sick industrial company under sub-section (1) of section 1727 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) and ending with the assessment year during which the entire net worth of such company becomes equal to or exceeds the accumulated losses. 65. Thus, plain reading of above clause provides that the amount of profits of sick industrial company would be eligible with ending with the assessment year during which the entire net worth of such company becomes equal to or exceeds the accumulated losses. The commencing point and the ....