TaxTMI 
TaxTMI 
2024 (11) TMI 356
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.... leased assets for the purpose of its business. 2. That, the Ld. CIT(A) on the facts and circumstances of the case and in law, has erred in uploading disallowance of 50% of the conveyance and telephone expenses to the extent of Rs. 9,84,356/- without appreciating the details & evidences submitted by the appellant and that all the payments were legitimately made by Appellant based on bills/vouchers submitted by employees of the Appellant. 3. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the addition of suo-moto writing off the sundry creditors with the alleged static balances amounting to Rs. 10,89,145, completely disregarding the submissions duly placed on record by the Appellant and disregarding the fact that in subsequent years, when such creditors were actually written off, the same was duly offered to tax by Appellant. 4. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) on erroneous and insufficient grounds and disregarding factual submissions and copy of TDS certificates furnished by the Appellant, has erred in upholding the disallowance of Rs. 1,77,450, disal....
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....that the AO had not doubted the genuineness & incurrence of expenditure and the inference emerged from the finding of the AO was that this lease rent was allowable if the same would have been debited in the regular books of account. The AO; nowhere, had given any finding that the lease rent was not genuine. The disallowance was made only on the reasoning that it was not debited in the books of account. Further, it was brought to our notice that similar expense/lease rent had been allowed in the subsequent year, in scrutiny assessment, by the AO. 4.1 The Ld. AR contended that the AO was not justified in taxing the lease rent even if the same was not debited in the Profit & Loss Account. Admittedly, the appellant/assessee had claimed this expenditure in the ITR in the computation of income statement. In support of the argument, the Ld. AR, placing reliance on the decisions of the Hon'ble Supreme Court in the case of Kedarnath Jute Mills Ltd. (82 ITR 363), the Delhi ITAT in the case of Ernst & Young Ltd. (order dated 31.05.2018 in the ITA Nos.6561 & 6562/Del/2016) and the Mumbai Bench of the Tribunal in the case of British Bank of Middle East (Order dated 19.10.2016 in the ITA ....
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....aced emphasis on the finding of the Ld. CIT(A) on the issue of lease rent and prayed for upholding the finding of the CIT(A) in this regard. 9. The second issue is in respect of disallowance of bogus conveyance & telephone expenses. The Ld. Sr. DR submitted that the Ld. AR did not bring any material on the record to contradict the finding of the Ld. CIT(A), who upheld 50% of the disallowance of Rs. 19,68,712/- observing as under:- "5.4.1 I have considered the assessment order, submissions of the Appellant, remand report of AO and copy of expense vouchers submitted as part of additional evidence in respect of reimbursement of conveyance and telephone expenses made to various employees. I find a number of discrepancies in the vouchers submitted by the appellant. Most of the vouchers produced/submitted are of purchase of petrol/diesel at petrol pump. Very few vouchers of telephone expenses are produced/submitted. I agree with the AO that these vouchers do not mention the name of the employees. In some of the vouchers of petrol from petrol pump, the amount is Rs. 4,000/- dated 26.05.2013, Rs. 3,000/- dated 25.12.2011 another bill of Rs. 3,000/- dated 27.05.2013. There are m....
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....een taxed on the reasoning that these liabilities were no more payable in the relevant year, which also got buttressed by the fact that the appellant/assessee had written of the same in the subsequent year and offered for the tax. He drew our attention to the finding of the Ld. CIT(A) inPara 5.5.1, wherein it was held that the sundry creditors were no more payable; i.e. non-genuine. The Para 5.5.1 of the appellate order reads as under:- "5.5.1 The Ld. AR during the appellate proceeding contended that these creditors are shown as outstanding liability in the balance sheet. The appellant acknowledges his liability to pay and therefore the liability still exists. The AR of the appellant was asked to file the copies of accounts of the creditors since beginning and the payment details if any in subsequent years. Nothing has been brought on record by the Ld. AR. The Ld. AR submitted that the appellant still had legal liability to pay these creditors in its books of account. It is also admitted by the Ld. AR that no payment have been made to the parties till date. In the light of these facts I am inclined to agree with the conclusion by the AO that these liabilities are no more p....
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....d by the authorities below. The reasoning for the disallowance is only that the same has not been debited in the books of accounts. Undisputedly, this claim has been made in the ITR in the computation of income. The Hon'ble Supreme Court, in the case of Kedarnath Jute Mills Ltd. (82 ITR 363), have held as under: - "The main contention of the learned Solicitor General is that the assessee failed to debit the liability in its books of accounts and, therefore, it was debarred from claiming the same as deduction either under section 10 (1) or under s.10 (2) (xv) of the Act. We are wholly unable to appreciate the suggestion that if an assessee under some misapprehension or mistake fails to make an entry in the books of account and although under the law, a deduction must be allowed by the Income Tax Officer, the assesses will lose the right of claiming or will be debarred from being allowed that deduction. Whether the assessee is entitled to a particular deduction or not will depend on the provision of law relating thereto and not on the view which the assessee might take of his rights nor can the existence or absence of entries in the books of account be decisive or conclusive....