2023 (10) TMI 648

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....Rs. 10,00,000/- made by the learned Assessing Officer on account of internet expenses debited in the books of the Appellant being the amounts debited by the bank on invocation of performance guarantee by the Department of Telecommunication. The C.I.T.(Appeals) erred in confirming the said disallowance on the ground that the said liability was a contingent liability not brought in the books of the Appellant at the time of creation of such contingent liability and has been rightly taxed by the learned Assessing Officer u/s. 69C of the Act. Your Appellant submits that the disallowance is not warranted in the facts and circumstances of the case and the same should be directed to be deleted. 2. The Learned C.I.T. (Appeals) erred in law and on....

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....n "creation of invocation event transaction". Apart from the above, an amount of Rs. 2,00,000/- was also debited in Profit & Loss Account as labour charges which is also unexplained expenditure as the company has already stopped operating since 2018 as per the narration of Assessing officer. Accordingly, the Assessing Officer completed the assessment under Section 143(3) on 29.11.2019 assessing total income at Rs. 9,25,340/- by disallowing the said expenditure as unexplained expenditure under Section 69C r.w.s. 115BBE of the Income Tax Act amounting to Rs. 12,00,000/-. 4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismiss the appeal of the assessee. 5. As regards Ground No. 1, the Ld. A....

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....ecision of Hon'ble Gujarat High Court in case of Neo Constructo Construction Ltd. (Supra). Ground No. 1 is allowed. 8. As regards Ground No. 2, the Ld. A.R. submitted that the labour expenses money to Rs. 2,00,000/- claimed by the assessee was paid to one staff which was doing administrative / accounting as well as miscellaneous office work and therefore, the same is related to the assessee's business itself. The Ld. A.R. submitted that the company was not closed too and the administrative as well as accounting of the assessee's business was operational during the period, therefore, the expenditure is revenue expenditure and the same should have been allowed. 9. The Ld. D.R. relied upon the assessment order and the order of the CIT(A). It....