2022 (11) TMI 656

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.... 2. In the present appeal, the assessee has challenged the additions made by the Ld. AO for four different items for which the Ld. CIT(A) has dismissed the assessee's appeal for non-prosecution. 3. Before us, Shri Srinivas Nayak, CA represented the assessee and Shri Mayur Kamble, Sr. D.R represented the Department. 4. Brief facts of the case are that the assessee is engaged in the business of manufacturing of iron and steel products. It filed its return of income on 28.09.2013 reporting total income of Rs. 2,93,84,260/-. Statutory notices were issued which were complied with by the assessee by filing and submitting the requisite details. Assessment was completed by the Ld. AO u/s 143(3) r.w.s 92CA of the Act wherein the following four add....

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.... that once the assessee himself has written off the amount in AY 2017-18 and offered it to tax the addition made by the Ld. AO in the year under consideration leads to taxing the said amount twice and therefore the addition so made u/s 41(1) of the Act by the Ld. AO ought to be deleted. He further submitted that there was no write off in the current year under consideration and the unilateral act by the Ld. AO is not warranted. ii) In respect of second issue relating to disallowance of Rs. 12,000/- towards transportation charges capitalized it was submitted that these charges were incurred by the assessee towards storage racks purchased from Presto Systems which has been duly capitalized to the asset under office equipment and forms part ....

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....ance on the findings of Ld. AO. 7. We have heard rival contention and perused the material on record and given our findings in the case which are following adseriatim with the issue listed above. On the first issue for addition made u/s 41(1), it is a fact on record that assessee has written off the said liability and offered it to tax in AY 2017-18 considering which we are inclined to accept the submission made by the Ld. Counsel and direct the ld. AO to delete the addition so made. Further it is settled position of law that unilateral right off in the manner which the Ld. AO has done cannot be sustained u/s 41(1) of the Act. In respect of second and third issue taken together, we note that it is an uncontroverted fact that assessee has n....

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....ted under the Income-tax Act. The assessee claimed that it did not incur any expenditure to earn that dividend. It is said to have invested surplus funds through the bankers and other financial institutions. The mutual fund officials used to come to the assessee's doorstep to fill up the forms and to do all other things necessary in that regard. The assessee only issued the Cheques. The Assessing Officer disagreed. He reckoned that without devoting time and without analysing the nature of the investment, the assessee could not have invested in the mutual funds. The Assessing Officer took the view that section 14A clearly applied to the assessee's case. The Assessing Officer accordingly invoked rule 8D and computed the disallowance a....