TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 353
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....cts and in the circumstances of the case and in law, the Id.CIT(A) erred in giving relief on the issue of addition of Rs. 3,13,5017- made on account of interest expenses, without appreciating the fact that the interest expenses as deducted against the interest received cannot be allowed, when the same is not correlated." 2. The brief facts of the case are that the assessee is an individual derives income from remuneration from M/s Amrutva Exports Pvt Ltd and Income from other sources. The assessee filed his return of income for AY 2009-10 on 15-07-2009 declaring total income of Rs. 23,88,230. The case was selected for scrutiny and notices u/s 143(2) and 142(1) of the Act were issued. In response, the authorised representative of the assessee appeared from time to time and filed various details. During the course of assessment proceedings, the AO noticed from the ITR details, that assessee has made huge investments of Rs. 7,01,32,021 in the units of mutual funds, bonds and debenture, etc. In order to ascertain the nature and source of investments, the AO called upon the assessee to file necessary details. In response, the assessee has submitted various details to prove source of in....
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....of total addition, a sum of Rs. 31,83,109 was towards repayment of loans and advances given by the assessee to various parties for which the assessee has filed complete details. Therefore, there is no reason to sustain addition made towards repayment of advances given by the assessee. As regards addition of Rs. 10,20,000, the assessee has filed details to prove that a sum of Rs. 10 lakhs is maturity of fixed deposits, therefore, no addition was called for. Similarly, regarding loans and advances although confirmations from the parties have been filed, the AO failed to take note of those details; but, only compared the returned income of the creditors vis-a-vis loan amount to reach to a conclusion that they did not have sufficient income to establish creditworthiness of the parties. But fact remains that the parties have confirmed their transaction with the assessee and, therefore, once there is identity of the parties and also the capacity has been explained, merely for the reason that they have declared less income in their income-tax returns, addition could not be made. The Ld.CIT(A) has taken further facts to the effect that out of unsecured loan borrowed from various parties, t....
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....members. When initial onus cast upon the assessee has been discharged, it is for the AO to prove that credits found in the books of account is unexplained income of the assessee, but, the AO has failed to do so. The Ld.CIT(A), after considering all these aspects has rightly deleted addition made by the AO and his order should be upheld. 7. We have heard both the parties, perused the materials available on record and gone through the orders of authorities below. It is an admitted fact that during assessment proceedings, the assessee could not file complete details of unsecured loans taken from various parties including confirmations and their addresses. It is also an admitted fact that the assessee has filed various details including confirmation from the parties in the form of additional evidences before the Ld.CIT(A). Although the Ld.CIT(A) given an opportunity to the AO to comment on additional evidence filed by the assessee, but, the AO has refused to admit additional evidence and also re-iterated his findings recorded in the assessment order about the creditworthiness of the parties to come to the conclusion that the assessee has failed to explain creditworthiness, therefore, ....
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....ch assessment details have been filed. Before the Ld.CIT(A), the assessee has made an altogether different submission to argue that even though Aditya Patel is having minimum income in his return of income, but the source of credit was from loan for which details of company alongwith PAN was submitted to the AO. Before us, the asessees has come out with one more argument that this is an advance received from the party against sale of certain agricultural land which has been finally adjusted towards sale consideration of land. The assessee has taken divergent arguments at different stages of proceedings. Therefore, considering all these aspects, we are of the considered view that the issue needs to be examined by the AO in light of the claim of the assessee that sufficient evidence has been filed in order to prove identity, genuineness of transaction and creditworthiness of the parties. Hence, we set aside the issue to the file of the AO and direct him to verify additional evidence filed by the assessee with a reasonable opportunity of hearing to the assessee . 9. The next issue that came up for our consideration is disallowance of interest expenditure. The AO has disallowed expens....