TaxTMI 
TaxTMI 
2020 (1) TMI 1140
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...., genuineness and creditworthiness of the loan creditors namely Narayan Sahoo & Pervezjamal as all the documents were filed in the Paper Book at the time of hearing and wrong in confirming the additions of Rs. 8,00,000 which is liable to be deleted. 3.That, the Ld. Commissioner of Income Tax (appeals) is wrong in confirming the additions of Rs. 4,28,100 with regard to the rent paid for show room u/s 40(a)(ia) of the Act in view of the fact that the recipients of the rent had disclosed the rental income in their return of income and duly discharged the tax liabilities. Therefore, the additions of Rs. 4,28,100 is liable to be deleted. 4. That, the Ld. Commissioner of Income Tax (appeals) erred in facts in circumstances in confirming the disallowance of audit fees paid to Anil Meher Associates amounting to Rs. 47,753 u/s 40(a)(ia) of the Act in view of the fact that the Auditor had shown the receipts of that audit fees in their return of income and discharge the tax liability and therefore the additions of Rs. 47,753 is liable to be deleted. 5. That, the Ld. Authorities below are not correct in disallowing the ad hoc disallowance of Rs. 4,73,611 (i.e. Rs. 58....
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....ledger account and the confirmations from 13 sundry creditors amounting to Rs. 21,42,479.05 in the paper book at pages 11 to 45 at the time of appeal hearing as under: Sl. No. Name of the sundry creditor Closing balance as on 31.3.2014 1. Hindustan Trading Co. 19,807.00 2. K.S.Agrotech 700.00 3. Madani Nut & Bold Centre 1,339.00 4. Mini Engineering 84,408.05 5. Paneswar Agriculture Industries 15,000.00 6. Panju Machinery Store 26,572.00 7. Sarbeswar Jena 18,000.00 8. S.JK.Rahman & S.F.Rahman 18,441.00 9. Virat Enterprises 49,743.00 10. Girijanandini Parida 870,000.00 11. Giridhari Senapati 852,000.00 12. Sachidananda Sahoo 110,000.00 13. Dharitri Agro Engineering 76,468.00 Total: 21,42,479.05 6.1 Ld A.R. submitted that once the sundry creditors have given their confirmations in the ledger account and the purchases are accepted by the AO, the addition of Rs. 21,42,479.05 be deleted. Ld A.R. referred to the decision of Hon'ble Allahabad High Court in the case of CIT vs. Panchan Dass Jain, 205 CTR 444 (All) for this proposition. 7. Replyin....
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....ervez Jamal which could prove the identity, genuineness of the transaction. Hence, the addition of Rs. 3,00,000/- is directed to be deleted. As regards to loan creditor of Shri Narayan Sahoo, we find that the assessee has filed only bank statement of the assessee in which cash amount of Rs. 5,00,000/- has been received from Shri Narayan Sahoo. Nothing is placed on record to prove the identity and creditworthiness of the loan creditor Shri Narayan Sahoo. In view of above, we confirm the addition of Rs. 5,00,000/- and partly allow Ground No.2 of appeal. 12. Ground Nos.3 & 4 of appeal, ld counsel for the assessee submitted that the amendment to Section 40(a)(ia) made by Finance Act, 2014 w.e.f. 01.04.2015 provides that 30% of any payable to a resident shall be disallowed if tax is not deducted at source under Chapter XVIIB as against the 100% presently made. The purpose of this amendment was explained in the memorandum as under:- "the disallowance of whole of the amount of expenditure results into undue hardship and therefore, in order to reduce the hardship, it is proposed that in case of non-deduction or non- payment of TDS on payments made to residents as specified in s....
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....this Court said that one should apply the rule of reasonable interpretation. A proviso which is inserted to remedy unintended consequences and to make the provision workable, a proviso which supplies an obvious omission in the section and is required to be read into the section to give the section a reasonable interpretation, requires to be treated as retrospective in operation so that a reasonable interpretation can be given to the section as a whole. 11. This view has been accepted by a number of High Courts. In the case of CIT v. Chandulal Venichand [1994] 209 ITR 7/ 73 Taxman 349 , the Gujarat High Court has held that the first proviso to section 43B is retrospective and sales-tax for the last quarter paid before the filing of the return for the assessment year is deductible. This decision deals with the assessment year 1984-85. The Calcutta High Court in the case of CIT v. Sri Jagannath Steel Corpn. [1991] 191 ITR 676 , has taken a similar view holding that the statutory liability for sales-tax actually discharged after the expiry of the accounting year in compliance with the relevant statute is entitled to deduction under section 43B. The High Court has held....
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....ction with staff tiffin, fuel, direct labour and direct expenses. However, since no evidence was filed, he made adhoc disallowance. We find that in this case, the assessment has been completed u/s.143(3) of the Act and the books of account are not rejected. We find that the nature of expenses have not been doubted or disbelieved by the Assessing Officer. We observe that the adhoc disallowance has been made on the basis of suspicion alone and no basis has been given by the AO. Hence, we direct the AO to delete the addition made on adhoc basis. Ground No.5 of appeal is allowed. 19. Apropos Ground No.6 of appeal, we find that since the assessee failed to furnish evidence of the payment of sales tax of Rs. 7,575/- and payment of entry tax of Rs. 15,970/- within the due date of filing of return u/s.139(1) of the Act, the addition was made by the AO and confirmed by the ld CIT(A). Before us also, no details were furnished by the assessee. Hence, we confirm the addition of Rs. 23,545/- u/s.43B of the Act. Ground No.6 is dismissed. 20. Apropos Ground No.7 of appeal, ld counsel for the assessee submitted that the assessee is engaged in the tractor business and spare parts. The amou....
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....eness of loans received in cash from both the persons is not in doubt and as there was business exigency, the assessee had accepted the cash loans. He submitted that the loan is genuine and there was no intention of tax evasion and violation of provisions of section 269SS of the Act and, accordingly, prayed for deletion of penalty. Ld counsel for the assessee relied on the decision of Cuttack Bench of ITAT in the case of Mamata Patra vs JCIT in ITA No.136/CTK/2017 for assessment year 2015-16 order dated 11.4.2018 and submitted in similar situation, the penalty levied under section 271D has been deleted. 28. Replying to above, ld D.R. submitted that as per section 269SS of the Act, whenever a person takes or accepts a loan of Rs. 20,000/- or more otherwise than by account payee cheque or draft or by use of electronic clearing system, the penalty provisions under section 271D of the Act are attracted. In this case, the assessee has taken loan in cash of Rs. 6,18,840/- and, therefore, penalty provisions u/s.271D are visited. He submitted that in this case, the assessee has not shown reasonable cause for accepting the loan in cash. Hence, he prayed that the order of the ld CIT(A) be....