TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1810
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...., the assessee has filed this appeal. 2. The background facts leading to present appeal are such that the assessee is a company engaged in the business of builders and developers. For AY 2011-12 under consideration, the assessee filed return declaring a total income of Rs. 12,20,243/-. The case was selected for scrutiny and the AO issued notices u/s 143(2)/142(1) which were complied by assessee. Finally, the AO passed assessment-order u/s 143(3) determining total income at Rs. 1,30,71,900/- after making certain disallowances/additions. Aggrieved, the assessee carried matter in first-appeal and got part relief. Still aggrieved, the assessee has come in next appeal before us. 3. The grounds raised by assessee are as under: "1. On the fact....
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....d Representatives of both sides and on a careful consideration of the detail of payment filed by Ld. AR for assessee in Written-Synopsis, we find that the assessee has made a cash payment of Rs. 47,337/- to M/s Amit Building Material Supplier on 28.08.2010 towards material purchased by assessee for consumption. The supplier is a private party. Ld. AR agrees that the payment attracts disallowance u/s 40A(3) but he defends assessee's case on two-fold premises. The first defense pleaded by Ld. AR is such that the payment has been made towards genuine business expenses and hence disallowance should not be made. However, this pleading is made for the sake of argument only and we indicated to Ld. AR during hearing itself that his contention/claim....
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....e by AO u/s 2(22)(e) and upheld by CIT(A) in respect of advance salary paid to director of assessee. 9. The facts relating to the issue are very short and do not require any elaboration. The AO found that the assessee-company has given advance salary of Rs. 3,00,000/- to its director and made addition in assessee-company's hands treating the same as "deemed dividend". 10. Learned Representatives of both sides are ad idem that the provisions of section 2(22)(e) do not contemplate addition in the hands of assessee-company. Therefore, the addition made by AO in assessee-company's hands is not as per scheme of section 2(22)(e) and cannot be sustained. In view of this, we delete the addition made by AO. This ground is allowed. Ground No. 3: ....
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.... respect of such trading liability by way of remission or cessation thereof, the amount obtained by such person or the value of benefit accruing to him shall be deemed to be profits and gains of business or profession and accordingly chargeable to income-tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not; or (b) XXX Explanation 1. - For the purposes of this section, the expression "loss or expenditure or some benefit in respect of any such trading liability by way of remission or cessation thereof" shall include the remission or cessation of any liability by a unilateral act by the first-mentioned person under clause....
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....n we receive money we start construction work. In this case the assessee has/not shown any work in progress or closing stock. The assessee has maintained its books of account as per its sweet will. In such circumstances the assessee did not debit its accounts by these amounts." 16. We have considered rival contentions of both sides and analysed the relevant facts in the light of provision of section 41(1). The undisputed facts emerging from discussions are such that (i) the assessee has received advances from customers against sales, (ii) the assessee has shown those advances in its Balance-Sheet as liabilities and not written off those liabilities in the books of account, and (iii) ultimately, the assessee has adjusted those liabilities a....
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.... of just Rs. 9,00,183/- which was only interest bearing. This loan was taken from Oriental Bank of Commerce for purchase of car of business. He submitted that out of interest expenditure of Rs. 1,29,649/- claimed by assessee, the interest on car loan itself was Rs. 1,15,369/- and the rest of interest expenditure was just Rs. 14,280/-. He submitted that the figures of assets, liabilities and interest expenditure claimed by assessee are self-speaking and in view of these facts and figures, the AO should not have been made any disallowance. 19. Ld. DR for revenue relied upon the order of AO. 20. We have considered rival submissions of both sides and carefully perused the assessment-order passed by AO as well as the documents field by assesse....