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AO couldn't reject method of accounting because he found bogus bills & unaccounted exp.

October 25, 2019[2019] 110 taxmann.com 121 (Delhi - Trib.)
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IT: Accounting defects of bills, seized documents showing unaccounted expenses and negative cash balance could not be reasons, individually or collectively to reject cash method of accounting regularly followed by assessee to reach at real profit/income of assessee

IT: Where charge against assessee of paying illegal gratification was not proved by evidence, addition made under section 69C on that account could not be sustained

TRANSFER PRICING: Transactions entered into with AEs were intrinsically linked to each other and no reliable data to benchmark same individually were available, appellant while applying TNMM correctly adopted entity level approach

IT: Where assessee had contract in form of turnkey agreement and cost of contract included all labour, material, plant and equipment necessary to carry out contract, merely looking at price of material, addition under section 69A could not be made in hands of assessee

IT: Provisions of section 69C could not be invoked in case of allegation of charging of higher consideration which was an item of income for assessee

IT: Whole of expenses cannot be disallowed as no business can be done without incurring any expenditure

IT: Addition made under section 69C on ground that certain bills were not seized during search, could not be sustained when subsequently assessee had produced original invoices and overwhelming evidence of payment to these parties through account payee cheques showing their names, addresses, permanent account Nos. and Assessing Officer did not make any further enquiry in that regard

IT: In view of overwhelming evidences produced by assessee of presence of foreign expatriates, with their passport details and expenses details coupled with liability of assessee to bear it, per diem payment made by assessee to foreign expatriates could not be disallowed

IT: Fact that no entry of sale was found in books of supplier could not be basis for addition in case of assessee as bogus purchases when assessee had produced original bills and bank statement showing payment made to supplier

IT: Where assessee had produced all details and documents to justify payment of professional fee, no addition could be made under section 69C rejecting said bills as bogus without giving any reason

IT: Mere fact that some other party had incurred expenditure less than assessee could not be ground to disallow expenses incurred by assessee in relation to flight, hotel accommodation and tours and travels of foreign staffs hired by assessee for its contract particularly when all expenses were supported with documents

IT: No disallowance could be made under section 40A(2) where both assessee-company as well as associate concern were assessed to income tax by same Assessing Officer and total amount received from assessee was duly offered to tax by associate concern

IT: Addition made under section 69C was justified where cash book of assessee showed negative balance on certain days

IT: In case of assessee, an event management company, expenditure incurred on purchase of fire detection alarm and traffic barrier would be treated as revenue expenditure but purchase of motor car would be capital expenditure

IT: Where invoice of security service provided complete details of what kind of service was taken and for what purpose it was taken, Assessing Officer had incorrectly considered that expenditure was a security deposit and disallowing same under section 37(1)

IT: Addition made on account of stock was not justified when assessee had given complete details of quantity and items along with rates and receipt on sale of such stock had been disclosed in subsequent year

IT: Without making any enquiry to prove that sundry creditors were non-genuine liabilities, Assessing Officer was not justified in making addition of said amount

IT: Loan received in earlier year cannot be added under section 68 in relevant year

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