2009 (12) TMI 981

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....ure and sale of readymade garments. It has local and export sales. The Assessing Officer has made the addition of Rs. 20,50,000/- as unexplained credit u/s. 68 of the I.T. Act since no confirmation letters were filed during the course of assessment proceedings. 3. In response to Notice u/s. 133(6) of the I.T. Act issued on 27.9.2005, no reply was submitted. Therefore, the AO held that the credit worthiness and identity of the loan givers remained unexplained and made the addition. 4. On appeal before the Ld. CIT(A), the AR of the assessee submitted that the assessee's inability to repay the lenders as promised had invited criminal complaints. The lenders refused to issue letters of confirmations inspite of the assessee's reque....

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....ollows: "After a careful consideration of the documentary evidence and other details filed by the assessee I come to this conclusion that in the case of Nick Lakhani, no satisfactory explanation or supporting evidence has been filed by the assessee. Therefore, the addition of Rs. 11,00,000/- made by the AO u/s. 68 of the I.T. Act is confirmed. In respect of Indian Trading Corpn. (Rs. 3,75,000/-), Nakul Jain (Rs. 1,60,000/-) and Premier Road Service Ltd. (Rs.2,00,000/-), no doubt, the appellant has submitted evidence for legal action taken against these parties, but in absence of satisfactory explanation, the creditworthiness and the genuineness of the transaction is not established. Under the circumstances, the addition ma....

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....ncome-tax and TDS, therefore, the disallowance is unjustified. 13. Before us, the department has come up on appeal and raised the following grounds: "1 On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing to delete the disallowance of proportionate interest of Rs. 12,53,435/- on interest free loans and advances by the assessee company. 2. On the facts and in the circumstances of the case & in law, the CIT(A) erred in accepting the assessee's submissions that loans and advances of Rs. 1,07,87,166/- as per schedule 10, was advance income tax and TDS, whereas Schedule 10 reveals that advance income tax and TDS is only Rs. 1,91,644/- and the remainder sum of Rs. 1,05,95,522....