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of <h1>Tribunal affirms lower authorities' decisions, dismissing appellant's appeal. Emphasizes evidence and creditworthiness for Income Tax Act compliance.</h1> <h3>M/s Krupanidhi Construction Versus Jt. Commissioner of Income Tax Baroda</h3> M/s Krupanidhi Construction Versus Jt. Commissioner of Income Tax Baroda - TMI Issues:1. Disallowance of expenses related to tractor hire charges, labour purchase, and salary expenses.2. Addition of unsecured loan under section 68 of the Income Tax Act.Issue 1: Disallowance of Expenses:The appellant contested the disallowance of Rs.3,57,885 by the Assessing Officer (A.O.) out of tractor hire charges, labour purchase, and salary expenses, which was reduced to Rs.1,00,000 by the Commissioner of Income Tax Appeals (CIT(A)). The A.O. disallowed the expenses as they were mostly made in cash without adequate supporting bills. The CIT(A) acknowledged the nature of civil construction business but limited the disallowance to Rs.1,00,000 due to unverified cash payments through vouchers. The Tribunal upheld the CIT(A)'s decision, stating the lack of evidence to support the expenses for business purposes.Issue 2: Addition of Unsecured Loan:Regarding the addition of Rs.3,75,695 under section 68 of the Income Tax Act, the A.O. raised concerns about the creditworthiness of the creditor who provided an unsecured loan to the appellant. The A.O. observed discrepancies in the creditor's bank transactions, doubting the source of funds for the loan. The appellant argued that the duty was to prove the source of the creditor only, not the source of the source. The CIT(A) upheld the A.O.'s decision, emphasizing the creditor's inability to save such a significant amount based on his salary. The Tribunal agreed with the lower authorities, dismissing the appellant's appeal and confirming the addition to the appellant's income.In conclusion, the Tribunal upheld the decisions of the lower authorities in both issues, leading to the dismissal of the appellant's appeal. The judgment highlighted the importance of providing verifiable evidence for expenses claimed and establishing the creditworthiness of creditors to avoid additions to the income under the Income Tax Act.
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