TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 427
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....ed loans as appearing in the balance sheet. Vide its letter, dtd. 29. 12. 2005, the assessee requested the AO to issue summons to the creditors. On the basis of the assessee's request summons were issued as per the addresses given by the assessee wherein no loan confirmation had been filed. Ten of the summons were returned by the postal authorities. The AO directed the assessee to furnish the new addresses and to produce the parties concerned. Hearing was fixed on 09. 02. 2006. However, instead of producing the parties, the authorized representative(AR)of the assessee appeared on 02. 03. 2006 before the AO and gave new addresses of six parties. There was no compliance to the summons issued at new addresses except by two of the six parties. The assessee was given an opportunity to furnish new addresses, vide order sheet noting dated 03. 03. 2006 and the matter was adjourned to 10. 03. 2006. In these circumstances, the AO added unsecured loans, from 14 parties, for want of confirmations. The AO noted that the AR of the assessee had admitted that the above loans have otherwise become barred on account of limitation. He held that these liabilities were carried forward year after year i....
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....assessee was not double addition, that the assessee did not make any repayment till A. Y. 2009-10, that the said amount would qualify being cessation of liability. He request the FAA to add the amount in question u/s. 41(1) of the Act. The FAA forwarded the copy of the remand report to the assessee for its comments. In its letter, dated 20. 04. 2010, the assessee stated that no allowance or deduction has been granted to it in the earlier assessment year in respect of the liabilities under consideration, that the liabilities were not trading liabilities, that the provision of section 41(1) of the Act were not applicable. After considering the submission of assessee and the assessment order along with the remand report of the AO, the FAA held that the assessee had dealt the matter and unresponsive manner, that it had failed to prove genuineness and the identity of the lender, that initially the AO was not supplied with the confirmation of the creditors, that summons were issued as the addresses given by the assessee on the request of the assessee, that the summons issued by the AO were returned by the postal authorities, that the AO requested the assessee to furnish new addresses an....
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.... the facts of the case. However, the FAA held that as per the provision of section 28(iv) value of any benefit or perquisite arising from the business of the exercise of profession was a taxable item of income, that the transaction in question had close and direct nexus with the business of assessee, that the amount of Rs. 19 lakhs was liable to brought u/s. 28(iv) of the Act. 5. Before us, the AR contended that the dispute was about 14 parties, that all the creditors were appearing in the balance sheets of earlier years and loans were more than 10 years old. He referred to page No. 177-179 of the PB and stated that the unsecured loans were still payable. He referred to the case of Jagat Kumar Patel(ITA/1219/Mum/2003 dt. 25. 3. 2015). He also referred to order of the AO for AY. 2001-02 and the order of the FAA who had decided the appeal for the AY. 2001-02. He contended that in the earlier year, the issue was set aside, that while giving effect to the order the AO had accepted the loan of AMFL. With regard to provisions of section 28(iv), he contended that provisions of said section were not applicable, that the assessee did not get any deduction. The Departmental Representative(D....
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.... letter about the loan advanced to the assessee. Return of income filed by SUB for the AY. s. 2005-06 and 2003-04 are available at Pg. No. 81 to 85 of the PB. The name of the assessee appears in the list of sundry debtors of SUB, as on 31. 3. 2005. He has also issued a confirmation letter on 1. 4. 1999. Pg. No. 65 is the confirmation of SUB, dt. 1. 4. 01 for the AY 2001-02. Pg. No. 70 to 73 of the PB are about Rajesh Bafna. The documents include return of income, computation of total income for the AY. 2003-04. In the details of loans and advances the name of the assessee is appearing. Raj Enterprise has issued confirmation letter for the AY 2001-02 on 1. 4. 01 and had confirmed the transaction with the assessee. It has also given its PAN. Vide its letter dt. 27. 2. 04 the assessee had filed the confirmation letters for the AY. 2001-02 including the confirmation of SUB and Raj Enterprise . It was further stated in the letter that in the cases of Manju J. Bafna, Pravin P. Bafna, Shailesh P Bafna, confirmation letters were not available. However, addresses were provided. As a result, the AO had added loan amounts appearing in names of Manju Bafna(Rs. 8. 00 lakhs), Praveen Bafna(6 lak....