Assessee paid making charges at different rates depending upon grades and location of Goldsmiths. AO allowed the expenses by applying lowest rate of making charges to total weight of gold and disallowed the excess by pointing out certain deficiencies in the vouchers and that the identity of Goldsmiths could not be verified. Tribunal observed that only amounts involved in defective vouchers should be disallowance. It observed that no specific defect was found other than few unsigned vouchers and non-maintenance of stock register. Since the making charges were collected from customers and offered to income, the disallowance held unjustified. (AY. 2014-15)
Grandhi Sri Venkata Amarendra v. ACIT (2018) 66 ITR 66 (SN) (Visakha.)(Trib.)
S. 37(1) : Business expenditure – Making charges paid to Goldsmiths allowable as the Assessee offered to tax the making charges collected from customers.