TaxTMI 
TaxTMI 
2020 (5) TMI 622
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.... has been received from the above persons. However, the assessee has paid bank interest. The AO, therefore, applying the interest rate of 15% per annum against such interest free advances, made an addition of Rs. 7,42,500/- to the total income of the assessee being deemed interest on such advances. Similarly, the assessee had shown advance of Rs. 59,95,000/- to M/s R.S. Distributors, Ghaziabad free of interest. The AO, therefore, made addition of Rs. 4,81,250/- being deemed interest @ 15% on such interest free advances. 4. In appeal, the ld.CIT(A) noted that the assessee has debited interest of Rs. 2,67,190/- in the P&L Account. Since the assessee did not submit any reconciliation to show that the advances are made out of non-interest bearing funds and since the assessee could not furnish the complete details in support of the grounds taken before him, the ld.CIT(A) restricted such addition to only Rs. 2,67,190/- being the interest debited by the assessee in the P&L Account and deleted the balance addition. 5. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal. 6. We have considered the rival arguments made by both the sides, perused the orde....
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....otel & Banuet 7,04,207/- Total 28,43,920/- 9. Since the assessee failed to prove the identity and credit worthiness of the above parties with any sort of authentic evidence, the AO held the same to be undisclosed money of the assessee and, accordingly, made the addition of the same to the total income. 10. In appeal, the ld.CIT(A) sustained the addition by observing as under:- "7. The facts of the case as well as submission made by the appellant have been gone through. The AO has noted in the assessment order that the appellant has given advances to various persons for Rs. 49,50,000/- and has not charged any interest. The AO has made addition of Rs. 742500/- on account of deemed interest on such advances made. Similarly, the appellant has shown advance of Rs. 59,95,000/- to M/s R.S. Distributors, Ghaziabad free interest. The AO has made addition of Rs. 481250/- by charging deemed interest @ 15%. The AR during the appellate proceedings has stated that he has not received any interest from such advances. On consideration of facts of the case, it is noted that the appellant has debited interest of Rs. 267190/- in the profit & loss account. The AR has not submitted any recon....
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....ined the addition on the ground that the cheques were not encahsed during the year and the amounts were unpaid and the assessee did not furnish any further details to show when and how the payments to the sundry creditors have been made in subsequent years. 13. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the AO with a direction to give one final opportunity to the assessee to substantiate regarding the subsequent clearance of the cheques and give an opportunity to the assessee to file confirmations from the said sundry creditors. The Ground No.2 raised by the assessee is accordingly allowed for statistical purposes. 14. In Ground No.3, the assessee has challenged the order of the CIT(A) in confirming the addition of Rs. 2,34,350/- on account of low household expenses, loans from friends and opening cash. 15. Facts of the case, in brief, are that the AO, during the course of hearing, observed from the cash flow statement filed by the assessee that the assessee has shown opening cash of Rs. 95,125/- and closing cash balance of Rs. 22,682/-. Since the assessee could not prove the availabilit....
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....g the year copy of which is placed at page 124 of the paper book. According to him, there is no restriction in keeping cash in hand and, therefore, addition of Rs. 80,000/- is not justified. Similarly, the estimation of family expenses at Rs. 2,40,000/- per annum according to him is also not justified. Referring to the decision of the Ahmedabad Bench of the Tribunal in the case of DCIT vs. Smt. Parvathiben P. Sukhadia, ITA No.1805/Ahm /2010, order dated 25th May, 2012, he submitted that mere estimation of household expenses without pointing out any specific expenditure being incurred by the assessee cannot be the basis for addition. Relying on various other decisions, placed in the paper book, he submitted that the addition has been made by the AO merely on the basis of surmises and conjectures and, therefore, the same should be deleted. So far as the amount of Rs. 55,000/- obtained from friends and relations is concerned, he submitted that full details were given, but, the Revenue authorities have not considered the same in the proper perspective. He accordingly submitted that the addition made by the AO and sustained by the CIT(A) should be deleted. 18. The ld. DR, on the other ....
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....ly, ground No.3 raised by the assessee is partly allowed. 20. The ld. Counsel for the assessee did not press ground No.4 due to smallness for which the ld. DR has no objection. Accordingly, this ground is dismissed. 21. Ground of appeal No.5 relates to the addition of Rs. 22,800/- made by the AO and sustained by the CIT(A) on account of transportation expenses of Rs. 9,600/- and HRA of Rs. 13,200/- respectively. 22. After hearing both the sides, we find in absence of any supporting details regarding the transportation expenses and house rent allowance, the AO made the additions. Since no details were furnished before the CIT(A) he also sustained the addition. It is the submission of the ld. Counsel that these are part of the salary statement and the lower authorities have not gone through the same. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the AO with a direction to give one final opportunity to the assessee to substantiate the same. Ground No.5 raised by the assessee is accordingly allowed for statistical purposes. 23. The ground of appeal No.6 raised by the assessee reads as under:- ....