TaxTMI 
TaxTMI 
TaxTMI 
2024 (9) TMI 260
X X X X Extracts X X X X
X X X X Extracts X X X X
....ies. 4. The learned CIT(A) erred in law in assessing the difference in closing balance without considering the reconciliation statement between the parties. 5. The learned CIT(A) erred in law in disallowing the expenditure u/s. 40A(3) without considering the payment was made within the limits prescribed. 6. The learned CIT(A) erred in law in disallowing the expenditure paid to Sales Tax department towards which are normal business expenditure. 7. The learned CIT(A) erred in law in disallowing the expenditure paid to Sales Tax department towards which are normal business expenditure. 8. The learned CIT (A) .erred in treating the cash deposit as unexplained credit u/s. 68, even though the appellant had explained the source. 9. The learned CIT(A) erred in law in disallowing the deduction claimed u/s 80C which was rightfully allowable. 10. For these and other grounds that may be rendered at the time of hearing. 3. The brief facts of the case are that the assessee has filed its return of income for AY 2014-15 on 29.11.2014 admitting total income of Rs. 2,31,330/-. The case was selected for scrutiny and assessment has been completed u/s. 143(3) of the Income Tax Ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....property. The assessee has computed 'Long Term Capital Gain' from transfer of property by way of Release Deed dated 07.08.2013 by taking into account the date of transfer of property as 06.03.2014 with reference to Deed of Declaration executed by three persons and claimed that property was held for more than 36 months, and thus, gain derived from transfer of said land is assessable under the head 'Long Term Capital Gain'. The AO assessed gain derived from transfer of land by way of Release Deed by taking into account date of transfer as per Release Deed dated 07.08.2013. According to the AO, the assessee has released rights in the property and received full consideration and handed over possession of the property, and thus, transfer as per Sec.2(47) of the Income Tax Act, 1961, took place on 07.08.2013 and on that date, the period of holding of the asset by the assessee was less than 36 months and consequently, profit is assessable under the head 'Short Term Capital Gain'. The AO had also rejected deduction claimed u/s. 54 of the Act on the ground that there is no provision under the Act to claim any deduction against Short Term Capital Gain, and further, the assessee has not satis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e parties, perused the materials available on record and gone through orders of the authorities below. There is no dispute with regard to the fact that the assessee along with four other co- owners has purchased property on 29.10.2010 by way of two registered Sale Deeds. It is also not in dispute that the assessee and one more co- owner jointly released their 50% right in the above two properties in favour of remaining three co-owners by way of Release Deed dated 07.08.2013. As per recitals of Release Deed dated 07.08.2013, there is no dispute with regard to fact that the assessee has received consideration and also handed over the possession of the property to the releasees on very same day. From the above, it is undoubtedly clear that the transfer as defined u/s. 2(47) of the Income Tax Act r.w.s.53A of the Transfer of Property Act, 1882, has satisfied on the date of release. If you consider the date of purchase of the property and Release Deed dated 07.08.2013, then, the period of holding of asset by the assessee is less than 36 months and in fact, this fact has not been disputed by the assessee. But, the only arguments of the assessee to justify the period of holding is more th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. The AO called upon the assessee to reconcile the difference. In response, the assessee submitted that difference in accounts balance of parties is mainly on account of accounting commission, where the assessee books expenditure as and when the sales took place and other party accounts in the subsequent year. The assessee claimed that entire commission payment is subject to TDS. The AO, however, was not satisfied with the explanation furnished by the assessee and according to the AO, mere deduction of TDS on payment, is not sufficient to prove the incurring of expenditure. Therefore, difference in commission payment in respect of three parties has been added to total income of the assessee. On appeal, the Ld.CIT(A) sustained the additions made by the AO. 5.1 The Ld.Counsel for the assessee submitted that the assessee has reconciled the difference and also explained why there is a difference between closing balance as per books of accounts of the assessee and balance as per party's ledger accounts. But, the AO and the Ld.CIT(A) ignored explanation furnished by the assessee and made additions. 5.2 The Ld.DR, on the other hand, supporting the order of the Ld.CIT(A) submitted that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... make additions towards cash payment u/s. 40A(3) of the Act, is violation of section 40A(3) of the Act. In our considered view, although, the assessee claims to have incurred freight expenses in cash within the prescribed limit, but on perusal of the details given by the AO in the assessment order, it is noticed that the assessee has paid a sum of Rs. 22,237/- towards freight expenses in cash in violation of Sec.40A(3) of the Act, which attracts disallowance. Therefore, we are of the considered view that there is no error in the reasons given by the Ld.CIT(A) to sustain the addition made towards freight paid in cash u/s. 40A(3) of the Act, and thus, we are inclined to uphold the findings of the Ld.CIT(A) and reject the ground taken by the assessee. 7. The next issue that came up for our consideration from Ground Nos.6 & 7 of the assessee's appeal is addition of Rs. 42,898/- towards Sales Tax / Penalty / Sales Tax paid on behalf of Digitran Prints and difference in Sales Tax turnover reported in the Income Tax Return and Sales Tax Return. The AO has made addition of Rs. 2,000/- of penalty paid under Sales Tax Act and a sum of Rs. 25,000/- which is debited in the P & L A/c. The asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....IRIS. The assessee has refunded advance received from parties through proper banking channel. Therefore, the AO is erred in making additions towards cash deposits into bank account, even though, the assessee has explained the source. The Ld.Counsel for the assessee further submitted that the assessee has received cash from Shri Narendra Kothari (HUF) and also filed confirmation from the parties, but the AO has made addition towards cash deposits by holding that Shri Narendra Kothari (HUF) has not filed Income Tax Returns to prove the source. But, fact remains that Shri Narendra Kothari (HUF) did not file return of income, because income for the above year is below the taxable limits. Although, the assessee has filed various details, the AO and the Ld.CIT(A) rejected the explanation of the assessee and made addition towards cash deposits u/s. 68 of the Act. 8.2 The Ld.DR, on the other hand, supporting the order of the Ld.CIT(A) submitted that the assessee has deposited cash into both bank accounts in Chennai, but claims that he has received cash advance from a party situated at Delhi. Further, there were no sales transactions as claimed by the assessee with IRIS. Further, the AO ha....