TaxTMI 
TaxTMI 
2014 (4) TMI 664
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....peals were posted for hearing on 28.3.2011, the assessee took adjournment. Thereafter, whenever the appeals came up for hearing, the assessee sought adjournment for one reason or the other. On this date of hearing, none appeared for the assessee therefore we have decided to proceed ex parte. ITA No. 254/M/2011 - A.Y. 2002-03 - Assessee's appeal 2. The first grievance of the assessee relates to the addition of Rs. 21,49,000/- being loan received from Shri Raouff Ansari as unexplained cash credit u/s. 68 of the Act and second grievance of the assessee relates to the addition of Rs. 2,640/- received from Mehur Movies u/s. 68 of the Act. 3. The assessee is a trader in precious jewelleries, eye wears, pens & watches. During the course of the scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has shown loans from directors and others. The assessee has taken loans from the following parties: Sr. No. Name of the party Loan taken during the year (Rs) Unsecured Loans M/s. Finex 4 Distribution 1. Mr. Rauff Ansari(NRI) 21,49,000/- 2. Deepak L. Shah 2,17,049 3. Dina Sudhir Shah 15,00,000/- 4. Magnum Exports 1,21,230/- 5. ....
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....). The addition of Rs. 21,49,000/- is confirmed. 8. The second grievance of the assessee relates to the addition of Rs. 2,640/-. The Ld. CIT(A) has confirmed this addition for want of verifiable details. As no details were provided, we do not find any reason to interfere with the findings of the Ld. CIT(A). Addition of Rs. 2,640/- is confirmed. 9. The next grievance of the assessee relates to the disallowance of Rs. 67,101/- as prior period expenses. 10. The AO has discussed this issue at page-3 of his assessment order wherein the AO has observed that the assessee has failed to discharge primary onus of substantiating its claim of deduction by providing the details. The AO disallowed Rs. 84,351/- as prior period expenditure. 10. The assessee carried the matter before the Ld. CIT(A). The Ld. CIT(A) has considered this grievance at para-6 on page-14 of his order. The prior period expenses claimed by the assessee read as under: 1. Leave Travelling Expenses Rs. 17,250/- 2. Repairs & Maintenance Rs. 2,500/- 3. Advertisement Expenses Rs. 42,500/- 4. Clearing & Forwarding Rs. 22,101/- Total Rs.81,851/- The Ld. CIT(A) , after considering the facts allowed l....
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....lly considering the order of the lower authorities, we find that in so far as this cash credit was concerned, the assessee has successfully discharged the initial onus cast upon it by virtue of Sec. 68 of the Act. Therefore, no interference is called for. 19. In the result, the appeal filed by the Revenue is dismissed. ITA No. 1740/Mum/2010 - A.Y. 2004-05 - Assessee's appeal 20. The first grievance of the assessee relates to the addition of Rs. 39,60,000/- received from the Managing Director of the company as cash credit u/s. 68 of the Act. 21. During the course of the assessment proceedings, the AO noticed that the assessee company has accepted loan from the following parties during the year under consideration. 1. Mr. Rauff Ansari (NRI) Rs. 58,21,621/- 2. Mr. Ali Ansari (NRI) Rs. 18,61,121/- 3. Qassam Ansari (NRI) Rs. 18,61,121/ 95,43,863/- 22. The assessee was asked to explain these cash credits in the light of the provisions of Sec. 68 of the Act. The assessee filed three Foreign Currency Remittance certificate. The assessee also filed the confirmation of balance of Finex Holding Inc which is the holding company which confirmed the rem....
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....bility was crystallized in the earlier year therefore cannot be allowed as expenditure during the year under consideration. 29. We have carefully perused the orders of the lower authorities. As the Ld. CIT(A) has given a clear finding regarding the crystallization of liability in respect of advertisement expenditure, no interference is called for. This ground is accordingly dismissed. 30. In the result, the appeal filed by the assessee is dismissed. ITA No. 2316/M/2010 - A.Y. 2004-05 - Revenue's appeal 31. The sole grievance of the Revenue is that the Ld. CIT(A) erred in deleting the addition of Rs. 10,21,687/- made by the AO u/s. 41(1) of the Act. 32. This issue finds place at para-2 on page-3 of the assessment order. On going through the balance sheet of the assessee, the AO noticed that the assessee has shown purchases at Rs. 1,92,95,723/- whereas the sundry creditors stood at Rs. 2,03,17,410/-. The assessee was asked to explain the outstanding liability. The AO noticed that all the purchases of the assessee are in the form of import from other countries. The comparison of the creditors as on 31.3.2003 and 31.3.2004 show that the creditors are outstanding for more th....
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.... company and accordingly disallowed the same. 38. It was explained before the Ld. CIT(A) that the assessee and its associated concern have common ownership , management and control. It was further explained that during the year the entire sales were made to the Bombay branch of the associated concern. Therefore, all litigation costs were undertaken to be borne by the assessee. After considering the facts and the submissions, the Ld. CIT(A) at para 2.2 on page 2 of his order observed that the assessee and its associated concerns are different entities carrying on business separately. The Ld. CIT(A) was convinced that the said expenses are not incidental to the business of the assessee and confirmed the action of the AO. 39. We have carefully perused the orders of the lower authorities. As the assessee has failed to substantiate its claim of expenses, we do not find any reason to interfere with the findings of the Ld. CIT(A). Ground No. 1 is accordingly dismissed. 40. Ground No. 2 relates to the disallowance of prior period expenses of Rs. 67,451/-. 41. This issue has been discussed by the AO at para-1 on page-2 of his order wherein the AO observed that the assessee is fo....