TaxTMI 
TaxTMI 
2018 (10) TMI 422
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....appeal of assessee was partly allowed. The Revenue and the Assessee are in cross-appeals as above. 3. We have heard the Learned Representatives of both the parties and perused the material available on record. Both the appeals are decided as under. C.O.No.409/Del./2015 - Assessee's Appeal : 4. On ground No.1, assessee challenged the disallowance of Rs. 1,53,072/- on account of electric repair and maintenance expenses. The A.O. noted that electricity repair and maintenance expenses has been claimed at Rs. 1,53,072/- in the P & L A/c. The details of these expenses were filed and perused by the A.O. It revealed that most of the expenses have been incurred for purchase of tube rods, electrical wires, condensers, capacitors etc. The A.O. noted that these items are of enduring nature and cannot be termed as consumables and rather in the nature of capital items. The A.O. allowed 10% depreciation on the same and made the addition of Rs. 1,37,765/-. The Ld. CIT(A) confirmed the addition. 5. After considering the rival submissions, we are of the view that the addition is wholly unjustified. Considering the nature of business of assessee, these expenses are incurred on electrical ....
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....violated Rule 46A in the matter because the books of account were not produced before A.O. which have been called by him at the appellate stage and after examination allowed the relief to the assessee. 12. On the other hand, Learned Counsel for the Assessee submitted that assessee did not file any additional evidence before Ld. CIT(A) and no additional evidence have been considered by the Ld. CIT(A). All evidences were produced before A.O. including cash book. He has referred to PB-193 which is a reply filed before A.O. at assessment stage on 16.03.2015, in which, the assessee in response to query of the A.O. submitted several details before him i.e., details of the stock, details of fall in gross profit, copy of ITR, computation of income and balance sheet of M/s. Shivam International Ltd., details of employees, note on role for fabrication in business activities, party-wise details of fabrication charges, copy of the cash book, copy of the purchase bills and details of the expenses. Learned Counsel for the Assessee, therefore, submitted that since books of account of the assessee produced before A.O, therefore, no additional evidence has been considered by the Ld. CIT(A). 1....
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....see was required to explain the role of fabricator in its business, the system of fabrication along with reconciliation of knitting process and party-wise details, monthly fabrication charges and their ledger accounts in order to justify the claim of fabrication charges. The A.O. however, noted that complete desired details were not submitted. The details submitted are in two parts i.e., monthwise fabrication charges and fabrication tax-free. It was submitted that the assessee-company takes the help of fabricator for the job of Panel knitting, Linking of palla (stitching) etc., Hand embroidery and bead etc., and Crocheted work etc., and other related work is also done to complete the above job. The A.O. however, noted that complete details are not provided to substantiate the claim. It was also noticed that fabrication charges were not subjected to TDS and all the expenses were made in cash. The reason of exigency for making payments to fabricators in cash was also not provided. The assessee merely stated that fabrication charges has been paid in course of business and were below the threshold limit prescribed for TDS provisions. The A.O, therefore, noted that assessee engaged serv....
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.... CIT(A). It was submitted that fabricators mostly comprise of migrants who come from different part of country temporarily, stay and work for a few months and return back to their native places. These workers do not function in an organized manner but keep migrate from place to place in search of work and as such, once they leave, the possibility of finding them is remote. The payment of fabrication charges to each fabricator is done on the basis of quantity and nature of work done by them, for which complete records are maintained. The payments are made by cheque as well as in cash. Tax has also been deducted on part of the payments. The assessee, therefore, produced complete details to satisfy the payment on account of fabrication charges. The assessee engaged only 1555 fabricators and not 3600 wrongly calculated by the A.O. Complete details have been maintained along with details of wages and salaries. All the details are verifiable. The assessee maintained regular books of account which are duly supported by bills and vouchers and subjected to check. The details of fabrication charges of earlier year were also filed to justify the payment of fabrication charges. 17. Ld. CIT(....
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....fication of these figures and facts so that proper revenue can be obtained from the company. Since the appellant had done proper maintenance of books of accounts, the addition made by the AO is not proper and hence deleted. This ground of appeals no. 2 is allowed." 18. The Ld. D.R. relied upon the Order of the A.O. and submitted that no remand report was called for from the A.O. No opportunity was given to the A.O. to verify the payment of fabrication charges. Therefore, matter may be remanded to the Ld. CIT(A) for passing the order afresh. 19. On the other hand, Learned Counsel for the Assessee, reiterated the submissions made before the authorities below and submitted that complete details on account of fabrication expenses under various heads and supported details are filed from pages 66 to 159 of the paper book. It contains names of the fabricator and his address. PB- 160 is the chart of fabrication charges for preceding three years in proportion of sales and average rate of fabrication charges. Learned Counsel for the Assessee submitted that in assessment year under appeal, the average rate of fabrication charges have increased as compared to earlier year. Similarly, the....
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.... have not been rebutted through any evidence or material on record by the Revenue. The Ld. CIT(A) also verified the details and the books of account and came to the finding that the assessee has maintained proper books of account and that there are no violation of TDS provisions. The Ld. CIT(A) on proper appreciation of facts and verification of the record and the books of account produced by the assessee, correctly deleted the addition. Therefore, there is no justification to restore back the matter in issue to the file of the Ld. CIT(A) for fresh examination as is argued by the Ld. D.R. We have also noted above that there is no reason for invoking Rule 46A in the matter. Therefore, no further interference is required in the matter. Ground No.2 of appeal of Revenue is dismissed. 21. On ground No.3, Revenue challenged the order of Ld. CIT(A) in deleting addition of Rs. 1,44,95,000/- made under section 68 of the I.T. Act. The A.O. noted that during the year assessee-company received loan of Rs. 1,44,95,000/- from M/s. Shivam International Limited. The assessee-company was asked to produce copy of the income tax return, copy of the balance-sheet and bank account to justify the gen....
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....cern is filing its return and not paying any tax, the total income of the appellant company is 224 but the AR argued that sister concern had transferred many from its long term borrowings of Rs. 2,26,37,663/-, as appearing in the balance sheet (schedule 4). This is a trend in all group companies. The AO had objection that the lender company had followed details as appear in page 4 of the assessment year. Share Capital - Rs.73.86 lakhs Reserve & Surplus - (-) Rs. 15.00 lakhs Long Term Borrowings - Rs.2.26 crores Trade Payables - Rs.2.46 lakhs Income returned during the A.Y. 2012-13 - 0 (zer0) From this he concluded that the creditworthiness of the lender was not proved and money is transferred from the balance sheet of the lender company to the appellant company. However, the AO is directed to send this information to the Assessing Officer of the lender company i.e ITO Co. Ward 8(2)/NWR/W/038/02 having its office at "D-6, NDSE, Part-I, South Extension, New Delhi-110001" . The office is located in Delhi but A.O is in N.W.R which is suspicion in the jurisdiction. The AO is directed to refer the matter to concerned A.O and pass on t....
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....in case such evidence is to be discarded or it is proved that it has "created" evidence, the Revenue is supposed to make thorough probe before it could nail the assessee and fasten the assessee with such a liability under s.68; AO failed to carry his suspicion to logical conclusion by further investigation and therefore addition under s.68 was not sustainable." 25.3. The Hon'ble Delhi High Court in the case of CIT vs. Vrindavan Farms Pvt. Ltd., etc., in ITA.No.71 of 2015 vide Order dated 12.08.2015, held as under : "The sole basis for the Revenue to doubt their creditworthiness was the low income as reflected in their return of income. It was observed by the ITAT that the AO had not undertaken any investigation of the veracity of the documents submitted by the assessee, the departmental appeal was dismissed by the Hon'ble High Court." 25.4. The Hon'ble Delhi High Court in the case of CIT vs. Value Capital Services Pvt. Ltd., (2008) 307 ITR 334 (Del.) in which it was held as under : "Dismissing the appeal, that the additional burden was on the Department to show that even if the share applicants did not have the means to make the investment, the investment ma....