TaxTMI 
TaxTMI 
2015 (6) TMI 22
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....h we will take up together, the Assessing Officer has raised the following grievances : "2. On the facts and in the circumstances of the case and in law, the learned CIT(Appeals) has erred in deleting the addition of Rs. 3,66,287/- out of the addition of Rs. 1,57,15,137/- on account of unclaimed liability and cessation of liability ignoring the findings of the A.O. 3. On the facts and in the circumstances of the case and in law, the learned CIT(Appeals) has erred in deleting the addition of Rs. 7,69,951/- made by A.O. on account of unclaimed liability in the name of Priyanka Jhunjhunwala ignoring the findings of the A.O. and wrongly treating it as addition made under section 68 of the I.T. Act." 4. So far as these grievances ....
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.... is evident on perusal of the copies of the balance sheet as at 31.03.2009 and 31.03.2010 that were submitted during the appellate proceedings. Under the circumstances stated above and in view of the discussions made above, I am of the considered view that the provisions of section 41(1) are not applicable to the instant case in respect of the liability standing against the names of the creditors namely, M/s. Geochem Laboratories, M/s. Jain House, Calcutta and Shri Sohan Lal Ghai. Accordingly, it is held that the Assessing officer was not justified in making the addition of Rs. 3,66,287/- on account of remission/cessation of liability under section 41(1) of the Act and the addition made by the Assessing Officer is not sustainable in law. Th....
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.... has made any enquiry for the verification of the loan before arriving at the conclusion that it remained unexplained. There is no evidence or material to even suggest, as pointed out on behalf of the assessee, that the money directly or indirectly emanated from the assessee so that it could be said that the assessee's own money was brought back in the guise of loan. The present case does not appear to be a case where the creditworthiness of the lender and the genuineness of the loan transaction in respect of the aforementioned loan could be called in question. 4.5. In view of the discussion made above, I am of the considered view that the A.O. was not justified in making addition on account of unsecured loan to the extent of Rs. 7,69,95....
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....he CIT(A) and decline to interfere in the matter. 8. Ground Nos. 2 & 3 are thus dismissed. 9. In ground No. 4, the Assessing Officer is aggrieved that the CIT(A) "has erred in deleting the addition of Rs. 21,86,710 made by the AO on account of salary ignoring that :- 4(i). The amount was far more excessive as compared to preceding year when there was some business activity whereas in the period under consideration there was no business activity. 4(ii). The assessee failed to furnish details of employees such as their name address and job being performed by them. 10. During the course of assessment proceedings, the Assessing Officer noticed that the expenses on salaries have gone up, from Rs. 4,08,882 in immediately preceding ....
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....t bringing on record any material to prove his case was not justified. It is well settled that it was for the assessee to decide how best to protect his own interest and/or what expenditure has to be incurred and in which circumstances every businessman knows his interest best and the AO cannot direct the assessee to conduct its business in a particular manner. Further reasonableness of the payment has to be judged not on any subjective standards of the AO but from the point of view of commercial expediency. In this context, reliance is placed on the decision of the Apex Court in S.A. Builders Ltd. Vs. CIT (2007) 288 ITR 1 (SC) (approving Delhi High Court judgment in 254 ITR 377). Relevant part of the judgment is reproduced hereunder :- ....