2016 (3) TMI 636

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..... 16,28,868/- made by the Assessing Officer under head unexplained unsecured loan as the assessee failed to prove the creditworthiness and genuineness of the person lending unsecured loan during the assessment proceedings." 3. Learned D. R. of the Revenue supported the order of Assessing Officer whereas Learned A. R. of the assessee supported the order of learned CIT(A). 4. We have considered the rival submissions. We find that this issue was decided by CIT(A) in favour of the assessee on the basis that this amount of Rs. 16,28,868/- added by the Assessing Officer u/s 68 is regarding opening balance of three outgoing partners and therefore, the same is not justified. We find no infirmity in the order of CIT(A) on this issue because op....

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....ning and closing balances in these accounts are not known and the assessee has not made any effort to prove even the basic requirement of law with regard to identity of persons. After making these observations, the Assessing Officer made addition of Rs. 2,20,87,655/-, which was deleted by CIT(A) on the basis that opening balance of unpaid liability of material and labour etc. of Rs. 2,17,03,387/- could not be treated unexplained unpaid liability in the hands of the assessee during the present year under consideration. As per the details available in paper book, we find that the ledger account of the creditors for material and labour etc. is available on pages 47 to 64 of the paper book. On page No. 47 of the paper book is opening balance as....

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....the contention that there are creditors for goods and/or expenses particularly in the absence of name and address of the said creditors. Hence, we reverse the order of CIT (A) on this issue and restore that of the A.O. Accordingly, ground No. 2 is allowed. 8. Ground No. 3 is as under: "3. The Commissioner of Income Tax(Appeals), Lucknow has erred in law and on facts of the case in allowing the salary of partners amounting Rs. 32,71,702/-." 9. Learned D. R. of the Revenue supported the order of Assessing Officer whereas Learned A. R. of the assessee supported the order of learned CIT(A). 10. We have considered the rival submissions. We find that the disallowance of salary to partners has been deleted by CIT(A) on the basis ....

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....y invoking the provisions of section 40A(3) of the Act. This disallowance was deleted by CIT(A) on the basis of submissions of the assessee before him stating that on each day, purchases were made in cash from different persons/parties on several occasions but the payment made to single party on single purchase did not exceed the limit of Rs. 20,000/-. No such instance has been noted by CIT(A). In the paper book filed before us also, no such evidence has been brought on record to establish that the date-wise cash payment noted by the Assessing Officer is not payment to one party but to different parties. Hence, on this issue also, we feel that the order of CIT(A) is not sustainable and therefore, we reverse the same and restore that of the ....