TaxTMI 
TaxTMI 
2022 (3) TMI 1331
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.... but the same has not been charged as an expense in the audited accounts/books. Apart from this since the appellant follows Mercantile accounting system, therefore, the impugned amount only is a provision of liability which is-not ascertained and is therefore in the nature of contingent liabilities only. 4. We find that the issue stands examined in the case of the assessee itself for earlier assessment years as under: "The disallowance on the identical issue was made for A.Y. 2003-04 which was confirmed by ld. CIT(A). However, the addition was deleted by ITAT, New Delhi on second appeal filed by the appellant against the order of the ld. CIT(A). The ITAT has held that liability to pay interest @18% in the case of NAFED crystallized on 28.1.2000 and the yearly interest claimed by NAFED was therefore allowed for A.Y. 2003-04. Addition for A.Y. 2004-05 was also deleted by the ITAT following their order for A.Y. 2003-04. For A.Y. 2001-02 and 2002-03, the succeeding bench of ITAT, New Delhi could not agree with the order of the co-ordinate bench for A.Y. 2003-04 and referred the matter for Special Bench for A.Y. 2001-02 & 2002-03. The Special Bench vide its order dated 16.10.2015 dis....
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....er collecting Market/Mandi fee and their handling charges loosely called as "commission" and after charging sales tax/VAT on the entire costs raises the invoice on the assessee. The appellant also maintains its purchase books/registers in a manner to depict all the components of cost for enabling the GOI to audit/verify the efficacy of the PSS/MIS operations. The assessee in turn supplies the goods through PDS or as directed by the Government. For all these operations, the assessee also receives over and above the price charged by the State/District level Cooperation Federation its own service charges. In the invoices raised, the assessee also charges applicable sales tax/VAT. 9. The A.O. based on the above submission/documents selectively produced certain clauses from the said agreement and held that part of the purchase price paid described by the State/District level Cooperative Federation are in the nature of commission within the meaning of section 194-H of the Act. 10. Addition for A.Y. 2009-10 has been deleted by the CIT(A)-18, New Delhi vide orders dated 30.03.2015. Thus, the same have been treated by the ld. CIT(A) as purchases and not commission. 11. The issue of appli....
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....return u/s. 139(1) of the Income Tax Act, 1961. No disallowance is called for u/s. 40(a)(ia) owing to the decision of the Income Tax Appellate Tribunal, Delhi 'H' Bench, in the case of Taru Leading Edge (P) Ltd., New vs ITO dated 22 May, 2012 in ITA no. 3592/Del/2011 for Assessment year 2008-09. Depreciation u/s. 32: 16. The AO disallowed 50% of depreciation on the warehouse holding that it has been put to use for less than 180 days. 17. Warehouse bills on sample basis were furnished vide letter dated 08.11.2011 to prove that the warehouse is in operation. The bills were issued by NAFED to FCI for giving warehouse storage facility by NAFED to FCI. These bills are therefore evidence to establish that the warehouse was in operation in the year under assessment. The invoices submitted on sample basis before the AO were not the purchase invoices for acquisition of the asset rather these invoices were in evidence to use of such assets. The document pertaining to handing over note of warehouse dated 31.03.2008 before the ld. CIT(A) which was remanded back to the office of AO. AO vide remand report dated 19.11.2013 rejected the claim of assessee without pointing out any reason ....
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....Rs. 33,16,35,813/-, as a result an amount of Rs. 10,03,22,868/- is sitting as the difference between the sale and the purchase. The said amount after reducing the actual service charges of Rs. 53,33,813/- which is the income of the assessee, the balance of Rs. 9,49,89,055/- is transferred to the tie-up associates is reflected on the debit side as "deficit of Reimbursement". 23. The AO made the aforesaid disallowance by holding as under: (a) Even though the prudence of assessee is not questionable by the assessing authority, the result of export transaction for 12500 MT of Non-Basmati Parboiled Rice is that on a turnover of Rs. 43.19 crore, profit of Rs. 10.03 crore has been earned. The entire profit has been earned by assessee by putting all its own efforts including deployment of the interest-bearing capital/fund, paid manpower and also other administrative expenses but out of that, the assessee has been passed on to the associate M/s. R. Piyarelal Global Impex Ltd. (RPGIL) who had virtually not done anything or at least not required to perform/invest in the transaction. (b) It has been pointed out that the assessee has incurred major expenses related to his business other th....
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....ning of LC and payment of P&L charges has been undertaking by NAFED and no liability towards that has been assigned to RPGIL; * All and entire efforts and exercise has been carried on by NAFED through its branches profit of Rs. 9,49,89,055/- has been passed on to RPGIL; * If in the NAFED could make an export of 87500 MT (100000-12500) quantity of rice, what stop it to make export the remaining quantity of 12500 MT. 24. The A.O. held that the transaction with RPGIL as a collusive payment which means that any arrangement by the assessee with the intent to avoid tax through a collusive device, and the real purpose was something else then what appeared on the face. 25. The AO relied upon the case of B.K. Khanna & Co. (P.) Ltd. vs. Commissioner of Income-tax [2001] 247 ITR 705 (DELHI). In that case, the Tribunal held that the transaction is not only malafide but a collusive also. 26. It was argued before us that under this model the purchases and sales are booked in the books of the assessee as normal purchase and sales of the commodity and the difference between the purchase and sales after reducing the amount of service charges is booked to the parties account being the amount ....
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....the assessee briefly are as under: "From the details of the respective branches it will be noted that the bills for the expenses were received during the year and therefore the liability has crystallized during the year, the depiction in the tax audit report does not necessarily lead to disallowance. Reliance in this regard is placed upon following case laws: * Saurashtra Cement and Chemical Industries Ltd. 213 ITR 523 (Guj) * Egmore Benefit Society 148 CTR 158 (Mad.) * Toyo Engg. Ltd. 5 SOT 616 (Mum) Issue regarding allowability of prior period expenses came up for consideration for the ITAT in the case of appellant itself for A.Y. 1984-85 in ITA No. 2296/D/88. The tribunal vide its order dated 12-08-91 upheld the action of the CIT(A) in deleting the addition made by the Assessing Officer on this count and for A.Y. 2004-05 came up for consideration before the ITAT and ITAT Delhi bench "F" following the decision of coordinate bench for A.Y. 1984-85 allowed relief to assessee." 35. Since, the expenses were found to have been crytalized during the year, no disallowance is called for. Disallowance of interest u/s. 36/37: 36. The proportionate disallowance of interest ha....