TaxTMI 
TaxTMI 
2022 (5) TMI 1465
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....respect of loss on account of reacquisition of assets. 2. The Ld. CIT(A) has erred, both in law and on facts of the case, in partly confirming disallowance in respect of land restoration expenses to the tune of Rs.1,07,375/- out of total land restoration expenses of Rs.43,70,892/-. 3. The Ld. CIT(A) has erred, both in law and on facts of the case, in directing the AO to verify assessee's claim that income corresponding to TDS credit has been offered to tax in other Assessment Years and allow TDS credit only to the extent of corresponding income disclosed in the year as well as to allow TDS credit in the year in which corresponding income has been offered. 4. The Ld. CIT(A) has erred, both in law and on facts of the case, in partly confirming disallowance in respect of bogus purchases to the tune of Rs.42,48,117/- (i.e. 25%) out of total purchases of Rs.1,69,92,471/-. 5. The Ld. CIT(A) has erred, both in law and on facts of the case, in confirming disallowance of Rs.14,62,818/- being irrecoverable deposits written off in books of account in respect of Earnest Money Deposit, Advance to staff, etc. 6. The Ld. CIT(A) has erred, both in law and on facts of the case, in confirm....
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....the due date, which is against the specific provisions of 36(1)(va) r.w. 2(24)(x) in this regard for the employees contribution vis-a-vis 'employees contribution' covered by u/s. 43B of the Act. (5) The Id. CIT(A) earned in confirming 25% of disallowance of total bogus expenditure (Rs.1,69,92,471/-) and deleting balance 75%, when he himself agreed fully with the AO that the assessee failed to discharge the once of proving the expenditure in para 8.3 of his order, which is against the provisions of sec.37 of the Act. (6) The Id. CIT(A) erred in allowing the expenditure under section 24 treating the rent income as house property income, when the assessee claimed expenses relevant to leased out property as business expenditure as pointed out by the AO in the order, which resulted in double deduction. (7) Ld. CIT(A) erred in directing the AO to disallow the interest worked out on per formula given by him as against the amount worked out by the AO, where in the Id. CIT(A) has wrongly used the "total funds" of the company' in the denominator as against the 'borrowed funds' on which the interest expenditure is claimed by the assessee. On the fact and in the cir....
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.... Rs.1,69,92,471/- relating to booking of bogus expenses thereby observing that the assessee was not able to produce confirmation from parties and not supplied PAN of the said parties. Thus, on the ground that the assessee did not prove the identity, capacity and genuineness of the transactions of the creditors, the said addition was made. The Assessing Officer further made addition of Rs.19,41,340/- towards security deposit and retention money. The Assessing Officer made addition of Rs.41,54,372/- towards payment to Axis Pvt. Equity Limited for due diligence as well as Rs.6,23,810/- towards dead stock. The Assessing Officer disallowed claim under Section 14A of the Act and made addition of Rs.8,74,323/-. The Assessing Officer also made disallowance for expenses of rent income amounting to Rs.17,03,472/- as well as interest on diversion of funds amounting to Rs.37,63,816/-. 5. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 6. We are first taking up Revenue's appeal for the Assessment Year 2008-09. As regards ground no.1 of Revenue's appeal relating to deletion of addition of Rs.56,08,748/-....
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....re with the findings of the CIT(A). Ground no.2 of Revenue's appeal is dismissed. 12. As regards to ground no.3 of Revenue's appeal in respect of treating land restoration expenses to the tune of Rs.42,63,517/- as revenue in nature, the Ld. D.R. submitted that the CIT(A) has ignored the finding of the Assessing Officer. These expenses were disallowed in A.Y. 2007-08 as well. The then Assessing Officer has treated the same as capital expenditure. 13. The Ld. A.R. submitted that this issue is directly covered in favour of the assessee by the order of the Tribunal in assessee's own case for the A.Y. 2007-08 (ITA No.925 & 1086/Ahd/2012, order dated 20.12.2013 wherein it has been held that if corresponding income has been offered for tax, then in view of the matching concept, corresponding expenses must be allowed. 14. We have heard both the parties and perused all the relevant materials available on record. The issue is identical in the present assessment year to that of A.Y. 2007-08 wherein the Tribunal has observed that if corresponding income has been offered for tax then corresponding expenses should also be allowed. To that extent the findings of the CIT(A) in assessee's favour....
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....emains that the sales were never disputed and thus purchases were in consonance with the sales made by the assessee. Thus, the deletion of 75% of bogus purchases by the CIT(A) was correct and there is no need to interfere with the findings of the CIT(A). The decision relied by the Ld. A.R. that of Gujarat Ambuja (Export) Limited is factually distinguishable and hence not applicable in the present case. Ground no.5 of the Revenue's appeal is dismissed. 21. As regards to ground no.6 of Revenue's appeal regarding allowing standard deduction under Section 24(1), the Ld. D.R. submitted that treating the rent income as house property income when the assessee has claimed expenses relevant to leased house property as business expenditure amounts to double deduction and, therefore, the Assessing Officer has rightly made this addition. 22. The Ld. A.R. submitted that the assessee let out part of its business and factory building and earned rental income in accordance with the lease agreement. Thus, the same comes under the purview of income from house property. The Ld. A.R. further submitted that once the rental income is taxable under the head income from house property, the assessee is e....
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....o need to interfere with the findings of the CIT(A). Ground no.7 of Revenue's appeal is dismissed. 27. Now we are taking up assessee's appeal. As regards ground no.1 of assessee's appeal relating to confirming disallowance of Rs.21,87,518/- made in respect of losses on account of reacquisition of assets. The Ld. A.R. submitted that the assessee sold certain assets in A.Y. 2007-08 declaring profit of Rs.21,87,518/- but the said transaction of sale was never materialised and, therefore, the assessee in assessment year 2008- 09 reversed the said transaction by booking loss of equipment amount. The Ld. A.R. submitted that the reversal entry was passed in the year under consideration so as to nullify the effect of gain offered in earlier year. The Ld. A.R. further submitted that the purchase price of the underlying assets has been recorded in A.Y. 2008-09 at the same value at which the same were recorded in A.Y. 2007-08. Thus, on account of reversal of transaction as to sale of the underlying assets, the assessee has claimed loss of Rs.21,87,518/- offered in A.Y. 2007-08. It is a settled law that only real income can be taxed and not notional income. The Ld. A.R. relied upon the decisi....
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.... the CIT(A) should have deleted this addition. When such sum becomes irrecoverable then the same are written off in the books of account and should be allowed as "business loss" under Section 28 or 37 of the Act. The Ld. A.R. relied upon the following decisions:- - CIT vs. Abdul Razak & Co. (1982) 136 ITR 825 (Guj) - Badridas Daga vs. CIT - (1958) 34 ITR 10 (SC) - CIT vs. Nainital Bank Limited - (1965) 55 ITR 707 (SC) - ITO vs. M.V. Mathew - (1994) 72 Taxman 89 (Cochin) (Mag) - Ramchandar Shivnarayan vs. CIT - (1978) 111 ITR 263 (SC) - Devi Films (P) Ltd. vs. CIT - (1970) 75 ITR 301 (Mad) - T.L. Lalvani vs. CIT - (1970) 78 ITR 176 (Bom) - DCIT vs. Gujarat Small Industries Corporation - 84 TTJ 22 (Ahd) - Lord's Dairy Farm Ltd. Vs CIT - 27 ITR 700 (Bom) 34. The Ld. D.R. relied upon the assessment order and the order of the CIT(A). 35. We have heard both the parties and perused all the relevant materials available on record. The contentions of the assessee that the said expenses/sum becomes irrecoverable were not disputed by the Revenue Authorities. Therefore, the Assessing Officer as well as the CIT(A) was not correct in treating the same as capital loss. The case laws rel....