TaxTMI 
TaxTMI 
2017 (8) TMI 713
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....od duly explained and proved. The reasons given by her for doing so are wrong, contrary to the facts of the case and provisions of law. b. The CIT(A) erred in upholding the action of the AO in making addition of Rs. 434,48,60,0007- u/s 68 of the Act without appreciating that there is no requirement to explain "source of source" and that nonetheless the same was explained. Addition due to AIR mismatch of Rs. 41,500/- a) The CIT(A) erred in law and facts in upholding the arbitrary addition of Rs. 41 ,5007- to the income of the Appellant solely on account of difference in the income as per the books of accounts and that reflecting in 26AS (AIR) data. The reasons given by her for doing so are wrong, contrary to the facts of the case and provisions of law. b) The CIT(A) erred in upholding the addition of Rs. 41,500/- to the income of the Appellant without any evidence of any real income accrued or received by the Appellant or there being any evidence of defect in the books of accounts." While the Revenue has taken the following grounds of appeal "1. On the fact and circumstances of the case and in law, the Ld. CIT(A) erred in deletin....
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....ed the creditworthiness of the lenders and nature of loans received to treat it as genuine transactions. The onus lies on the appellant. Until and unless it is proved that the unsecured loan transaction within, group concerns are for genuine commercial transaction it cannot be allowed. Appellant has to explain the source of fund within the group entity. Merely filing the copy of ITR along with balance sheet, profit and loss account and bank statement is not sufficient especially so when and where the AO has found that the appellant has not explained or produced any evidence to justify the purpose of loan taken and utilisation of the same for business purpose. Though it is not necessary for the appellant to prove the source of source in (normal circumstances but in the circumstances as narrated above, it is necessary for the appellant to provide the source of source and complete justification for the creating of such web of transaction in the garb of unsecured loan. Therefore, the case is to be dealt with the principle of human conduct and probabilities Therefore, 1 do not find force in the submission of the appellant. Accordingly ground no 1 of the appeal is dismissed" 4. The le....
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....ublishing Private Ltd.. The Assessing Officer while framing the assessment for the subsequent assessment year i.e. 2014-15, duly accepted the unsecured loan and no addition in this regard u/s. 68 of the I T Act has been made in the case of the assessee. Attention was also drawn towards the copy of the assessment order in the case of M/s. Prime Publishing Private Ltd., which was filed during the course of hearing and it was pointed out that no addition in this regard has been made in the hands of M/s. Prime Publishing Private Ltd. even though the assessment has been made u/s. 143(3) of the I.T.Act. He vehemently contended that the assessee has discharged the onus whatever lies on it. The assessee even though is not required to prove the source of the source as laid down in the following cases has still proved the source of source : CIT vs. Bedi And Company Private Limited 230 ITR 580 (SC) DCIT vs. Rohini Builders 256 ITR 360 (Guj) 5. The learned DR, on the other hand, contended that the assessee has not proved the credit worthiness of the lender. Lender does not have own sufficient funds to advance loan. No interest has been charged inspite of the fact that the ....
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....me towards the payment of the salary, which has been subsequently reimbursed by debiting the account of M/s. Prime Publishing Private Ltd. The assessee has submitted the confirmation copy of the ITR of M/s. Prime Publishing Private Ltd, its audited balance sheet, profit and loss account, copy of bank statements of M/s. Prime Publishing Private Ltd and that of the assessee. The assessee has also submitted the chart summarizing the loan taken from M/s. Prime Publishing Private Ltd as well as the chart summarizing the sources of M/s. Prime Publishing Private Ltd at pages 86 and 87 of the paper book. Not only this, we noted that the assessee has also filed analysis of the cumulative balance without opening balance, which is available at pages 88 and 89 of the paper book showing the receipt and repayment of loans from M/s. Prime Publishing Private Ltd, which gives a peak credit that only Rs. .32,81,50,000/- to prove that maximum amount received by the assessee during the impugned assessment year was Rs. 32,81,50,000/-, if both the receipts and payments are analyzed. 7. Now the question before us arises, whether the said credit can be added u/s68 of the I.T.Act to be held as une....
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....y exercising powers under Income-tax Act, then the claim of the assessee cannot be straightway rejected. If he does, it would be a violation of principles of natural justice and provisions of section 68. The expression "the assessee offers no explanation" means where the assessee offers no proper, reasonable and acceptable explanation as regards the sum found credited in the books of account maintained by the assessee. The opinion of the AO for not accepting the explanation offered by the assessee as not satisfactory must be based on proper appreciation of the material and other surrounding circumstances available on record. The opinion of the AO is to be based on appreciation of the material on record. The word "may" used in section 68 provides discretion to the AO. In general the word "may" is an auxiliary verb clarifying the meaning of another verb of expressing an ability, contingency, possibility or probability. When used in a statute in its ordinary sense the word is permissive and not mandatory. But where certain conditions are provided in the statute and on the fulfillment thereof a duty is cast on the authority concerned to take an action, then on fulfillment of thos....
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....Prime Publishing Private Ltd. and also furnished the chart showing the receipt and payment of loans from/to M/s. Prime Publishing Private Ltd. Copy of bank statement of M/s. Prime Publishing Private Ltd. as well as the statement showing the receipt and payment of the amount has also been filed. From the copy of the balance sheet of M/s. Prime Publishing Private Ltd., which is available at pages 38 to 53 of the paper-book, it is apparent that M/s. Prime Publishing Private Ltd. has borrowed a sum of Rs. 400,00,00,000/- by issue of nonconvertible debentures and Rs. 570,02,73,000/- as inter corporate deposits from Spirit Textiles Pvt. Ltd, which is the holding company of M/s. Prime Publishing Private Ltd. From all these details, it is apparent that the assessee has proved all the three ingredients i.e. identity, credit worthiness as well as the genuineness of the transactions. This is not a case where money has been received in cash or borrowed from whom the money has been received as deposit. We do agree with the learned AR that the assessee has not to prove the source of source, in view of the decision of Hon'ble Supreme Court in the case of CIT vs. Bedi And Company Priva....
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....inion duly prove the identity, credit worthiness and genuineness of the transaction. It is not the case of the assessee that it has not offered any explanation. It is a case where the assessee has duly offered explanation, explaining the nature of source of the amount borrowed by it. In view of these facts, we set aside the order of the CIT(A) and delete the addition made u/s. 68 of the I.T.Act. 10. Ground no.2 in assessee's appeal relate to the sustenance of the addition of Rs. 41,500/-. After hearing the rival submissions and going through the order of the tax authorities below, we noted that the difference has arisen due to the mistake committed by Continental Drug Company Pvt. Ltd., which it has rectified by submitting the revised Form 26AS as contended by the learned AR. We, therefore, in the interest of justice and fair play to both the parties set aside the issue to the file of the Assessing Officer with a direction that the Assessing Officer shall look into the revised form 26As and verify the same. In case, the Assessing Officer finds that there is no difference in the revised form 26AS, the addition made shall stand deleted. 11. ITA No.3364/Mum/2017 Grou....
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....itted before the Assessing Officer copy of the ledger account showing details of these expenses. The Assessing Officer never asked for bills/vouchers from the assessee. No cogent material or evidence was brought to our knowledge by the learned DR to prove that the Assessing Officer has given opportunity to the assessee to produce bills/vouchers in respect of the aforesaid expenses. We, therefore, confirm the order of the CT(A) and delete the disallowance of Rs. 11,30,242/-. 15. The third ground relates to deleing the disallowance of Rs. 2,09,73,983/- u/s. 14A read with Rule 8D. The facts relating to this ground are that the Assessing Officer noted that the assessee has incurred interest expenditure amounting to Rs. .102,65,44,828/- during the year. The assessee has not earned any dividend income. The assessee was asked to furnish the details of expenses admissible u/s. 14A read with Rule 8D. The Assessing Officer noted that the assessee has disallowed a sum of Rs. 75,46,64,787/- u/s. 14A read with Rule 8D. The Assessing Officer computed the disallowance of Rs. .77,56,37,770/- and, thus, disallowed the difference of Rs. 2,09,73,983/-. The assessee went in ....