TaxTMI 
TaxTMI 
2013 (4) TMI 64
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.... allowed was very short. 4. That furthermore, the ld. CIT(A) has grossly failed to appreciate that one of the partner Sh. Jaspal Singh who was dealing with the affairs of the firm was not feeling well for the last two months and was confined to bed. 5. That the ld. CIT(A) failed to appreciate that the factory of the assessee was closed since 2007 and the whole business was upset being labour strike and other problems occurred in the factory. As a result of this the whole condition of the factory was disturbed and the assessee as under financial crisis and as such there was no justification in dismissing the appeal in lime line without knowing and appreciating the facts of this case. 6. That the ld. CIT(A) has miserably failed to appreciate the facts and that the circumstances of this case and a grave injustice was done by the AO while deciding the case and thereby making heavy addition which was not at all called for. Thus, a grave injustice has been done and the principle of natural justice has been completely violated by worthy CIT(A) while deciding the appeal and confirming the addition without going into the facts and merits of the case. Thus, the add....
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....enses Rs. 15,794/- ii) Out of car depreciation Rs. 35,408/- iii) Out of Telephone expenses Rs. 17,885/- The Ld. CIT(A) further failed to appreciate that these expenses were incurred during the course of business and were necessary for carrying on the business and there was no justification for disallowing the same. 12. Any other ground of appeal which may be urged at the time of hearing of the appeal." 2. The asessee has not pursued grounds No. 1 to 7. Therefore, the same are dismissed. 3. Ground No.12 is general in nature and therefore, do not require any adjudication. 4. As regards grounds No. 8 to 11, the brief facts as emanating from the order of the AO dated 16.12.2009 are reproduced hereinbelow for the sake of clarity: "The assessee firm deals in Mfg. of Textile Machinery. The books of accounts as per audit report are cash book and ledger only. The details of sundry debtors and creditors is as under: Sales 5800000 Sundry Debtors 701237 Sundry Creditors (for goods) 2250757 (For Advances against Supply of machinery) 4842663 (total) 7098420 Books accounts/information including docume....
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.... No explanation was made on the fixed date on 3.12.2009 and counsel of assessee and requested adjournment and case adjourned to 8.12.2009 and no compliance was made on this date. It was also found that counsel of the assessee had not furnished complete information as claimed vide letter dated Nil, i.e. it was claimed that confirmed copies of accounts were filed in respect of all debtors and creditors but no such confirmed copies of accounts were filed. It was also stated that balances are still outstanding as on date. Assessee vide this office letter dated 14.12.2009 was asked to explain as to why the wrong information was filed fixing the case for 16.12.2009 when counsel Sh. P.N. .Arora attended the office and stated that it was wrongly mentioned that confirmed copies of acdounts and complete addresses were given. Accordingly assessee has failed to prove and establish the genuineness of the creditors including audited list of Debtors showing your creditors and details of payments made alongwith copies of accounts for the Assessment year 2008-09 and 2009-10 and reasons for non payments and mode of payments if payments made and evidence of payment....
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.... regarding other creditors of Rs. 4847663 for Advances against supply of Machinery has been furnished. As per copies of account of these creditors and also as stated following amounts of unsecured loans are included in the list of creditors as under: Smt. Ujjal Kaur 1051302 Smt. Manjit Kaur 729238 Smt. Rayam Kaur 848798 2630038 And accordingly balance amount of Rs. 2217625 is added to the income Assessment is made and income is computed as under: Accordingly income is computed and assessed as under: Income returned 44000 Income added in respect of Creditors for goods 1474763 Income added in respect of Creditors for advance against Supply of machinery 2630038 4104801 4104801 Expenses for personal use 30% of Car Expenses (52649) 15794 30% of car depreciation (1182027) 35408 Telephone (59618) 17885 Total Income 4217888 " 5. The Ld. CIT(A) at the outset, dismissed the appeal of the assessee being not pursued inspite of notices served. At the same time, the ld. CIT(A) decided the appeal on merits and confirmed the action of the Assessing Officer i.e. with regard to confirmation of a....
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....plained expenditure has been paid outside the books. There is no record or material available with the AO with regard to payment of such liability when explanation was submitted which itself is available in the assessment order at page 2 that the balances of the creditors are still outstanding as on date. Mr. P. N. Arora, Advocate, further argued that the provisions of section 41(1) cannot be made applicable since the assessee has not obtained any benefit during the year. The assessee has not written back the liabilities unilaterally. Moreover, all the liabilities i.e. Rs. 14,74,763/- as well as Rs. 26,30,038/- are the liabilities which are existing liabilities. Rs. 14,74,763/- are the sundry creditors which areoutstanding in the preceding year and no fresh cash credit has been received during the year. The Ld. counsel for the assessee, Mr. P.N. Arora, invited our attention to the copies of accounts of all creditors at paper book pages 6 to 21 with regard to said creditors of Rs. 14,74,763/-. Mr. P.N. Arora, Advocate further invited our attention to the addition confirmed by the ld. CIT(A) in para 6 of his order that the assessee failed to discharge and to establish genuineness of ....
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....rious courts of law in this regard, available at PB-94 in the written submissions available at pages 93 to 96. He also pointed out the mistake in the order of the AO where he has mentioned that no explanation regarding other creditors of Rs. 48,47,663/- for advances against supply of machinery has been furnished and accordingly made an addition of Rs. 22,17,625/- on one hand in the body of the order and in the computation of the income in the order at page 3 of the order. He made an addition of Rs. 26,30,038/- being the amount of unsecured loans in the case of Smt. Ujjal Kaur, Smt. Manjit Kaur and Smt. Rayam Kaur, whose amount was outstanding at Rs. 10,51,302/-, Rs. 7,29,238/- and Rs. 8,48,798/- totaling Rs. 26,03,038/- is a matter of record in the assessment order. The Ld. CIT(A) has also with complete application of his mind has confirmed the addition made by the A. O. The Ld. CIT(A) has also observed that the assessee has not proved the identity, capacity and creditworthiness of unsecured family loans and the family loans are fromSmt. Ujjal Kaur, Smt. Manjit Kaur & Smt. Rayam Kaur. Mr. P.N.Arora,Advocate, accordingly prayed to reverse the order of ld. CIT(A) w.r.t. theseaddition....
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....rought forward from the preceding year except provisions of interest in the respective years and in the impugned year which has not been disallowed by the AO. The liability pertains to the preceding year, as is evident from pages 6 to 21 where copiesof accounts of all sundry creditors are placed on record and were available before both the authorities below. The said balances are outstanding in the following years as well is a matter of record and there is no dispute to the said fact. The assessee has not obtained any benefit out of such liability which is not ceased to be a liability and the assessee has not written back such liability unilaterally in its books of account. Therefore, such liability cannot be a subject matter of section 41(1) of the Act. It is also a matter of record in the order of the A.O. where the assessee had made some payments during the assessment years 2008-09 & 2009-10, which the AO at page 2 has mentioned in his order. Inspite of such facts on record, the matter did not find favour to the AO and confirmation made by the Ld. CIT(A) in a summary manner is not justified. The assessee is assessed to income-tax regularly, is on record and sundry creditors are ....