Case Law Details
Brief Facts:
1. The assessee is a company, that filed its income tax return for the Assessment Year 2004-05, declaring an income of Rs. 10,40,11,590/-. Scrutiny Assessment under section 143(3) of the Income Tax Act, 1961 was completed on 22.03.2005.
2. After that, Assessing Officer issued notice u/s 148 of the Income Tax Act, 1961 and gave the following reasons for the same:-
a) The assessee company showed Unsecured Loans from Directors in the Balance Sheet, amounting to Rs. 4,13,61,284/- as compared to Annexure-1 to Form 3CD of Audit Report, wherein the amount was 17,76,66,492/-. The differential amount i.e. Rs. 13,63,05,208/- was not accounted for, in the books of assessee company.
b) ‘Repairs of Machinery and Building & Purchase of Capital Items’ amounting to Rs. 53,64,710/- and ‘Design and Art Work’ amounting to Rs. 12,92,529/- were wrongly debited to Profit & Loss Account by the assessee company. The aforementioned expenses were capital in nature and had to be disallowed and added to assessee’s income subsequently.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
