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| The Tax Publishers2019 TaxPub(DT) 0158 (Kol-Trib) INCOME TAX ACT, 1961
Section 37(1)
Where AO disallowed discount on sale of flats, stating that some of the parties whom the discount has been given had informed that no discount received from assessee and did not allow assessee to cross-examine witness, it was a serious flaw and thus, disallowance was not justified
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Business expenditure - Discount on sale of flats - Failure to bring cogent evidence to show that amount debited in P&L Account was bogus -
AO diallowed discount on sale of flats, stating that some of the parties whom the discount was given had informed that no discount was received from assessee, without giving assessee the proper opportunity to cross examine the respective parties who denied receipt of this discount. Held: Addition was made without taking full details of payment made by assessee and without giving assessee the proper opportunity to cross examine respective parties who denied receipt of discount. AO failed to bring any cogent evidence to show that amount debited was bogus. Assessee had incurred said expenses for purpose of business and therefore, was eligible to claim deduction on account of discount allowed on sale of flat. Not allowing assessee to cross-examine the witness, though the statements of those witnesses were made basis of addition, was a serious flaw.
Relied upon:Andaman Timber Industries v. Commissioner of Central Excise, Kolkata-II 2015 (324) E.L.T. 641 (SC) : 2015 TaxPub(EX) 2155,
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2012-13
IN THE ITAT, KOLKATA BENCH
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