TaxTMI 
TaxTMI 
2020 (11) TMI 927
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....t of unsecured loan received without appreciating the facts that the additions are made on the facts of the case that the creditworthiness/genuineness have not proved during the assessment proceedings which are not a business income. 3. On the facts and in the circumstances of the case, the Ld. CIT (Appeal) has erred in deleting the addition made by the AO at Rs. 23,25,000/- on account of disallowance of interest in proportionate to non-business advances given out of interest bearings funds and interest is claimed as expenses without appreciating the facts that such interest expenses are claimed after estimation of Gross Profit. 4. On the facts and in the circumstances of the case, the Ld. CIT (Appeal) has erred in deleting the addition made by the AO at Rs. 92,79,740/- on account of undisclosed investment made from undisclosed source and earned interest there upon without appreciating the facts that the additions are made on the strength of impounded documents. 5. On the facts and in the circumstances of the case, the Ld. CIT (Appeal) has erred in deleting the addition made by the AO at Rs. 98,59,212/- on account of undisclosed investment without appreci....
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....he primary documents to prove the genuineness of the transactions. 8. The ld. CIT(A) deleted the addition on the grounds that the income of the assessee has been estimated by calculating the GP, hence no separate addition is called for on account of unsecured loans. 9. Before us, the ld. DR taken up arguments in two folds, 1. That the decision of the ld. CIT(A) that no separate addition is called for on account of loans, once the income has been estimated is totally on a wrong interpretation of judgments and facts of the case. 2. It was argued that the assessee has failed to discharge the onus of identity, genuinity and creditworthiness of the four loan parties. It was further argued that the AO has clearly mentioned that the basic details to prove identity, genuinity and creditworthiness of the loan parties have not been provided. 10. Before us, the ld. AR reiterated the arguments taken before the ld. CIT(A). 11. Regarding the addition on account of loans received, it was argued that loans were received from identifiable parties and through banking channel. It was, thus argued that burden of the assessee in respect of the loans received from various p....
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....essee to bring anything contra. The addition has been made without conducting any enquiry on the grounds that the assessee has not filed the primary documents necessary to prove the genuineness of the loans, the observation of which, we find contrary to the facts on record. Hence, the addition made on account of the loans from the above parties is directed to be deleted. Ground No. 3 : Disallowance of Interest 14. The AO held that the assessee has advanced Rs. 1,99,35,720/- to various parties and no interest has been received. The AO calculated interest @ 12% on these advances and disallowed an amount of Rs. 23,25,000/- and deducted the same from the interest expenses paid. 15. Before us, it was submitted that perusal of the financial statements on record would show that the assessee had claimed expenditure on interest of unsecured loan of Rs. 5,84,432/- and Rs. 24,56,648/- on interest on loan raised from the bank. Thus, aggregate interest on expenditure claimed is Rs. 30,41,080/-. It was submitted that the secured loan stood at Rs. 1,77,05,427/- at the end of the year, which is a CC limit raised from the bank against the hypothesis of the stock. It was submitted that the ....
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....Sep. 2009 Oct. 2011 25 @25 ps 5,66,125/ - 50,58,000 Nov. 2011 Aug. 2013 22 @25 ps 2,78,190/ - 18. On enquiry by the AO, the assessee explained that this page is a rough calculation of interest on the advance amount given to one M/s. S.K. Traders Hansi. It was explained that due to the dispute between the parties, minimum interest was calculated to settle the dispute but the party did not agree and the assessee ultimately received the principle amount in the year 2013-14. It was also stated that as on 31.03.2012 an amount of Rs. 65,23,720/- was shown in the balance sheet in the schedule of loans and advances. The Assessing Officer brought the amount of Rs. 90,58,000/- along with interest to tax. 19. Before us, it was submitted that this page pertains to old loan received from one M/s. S.K. Traders which has been duly reflected in the regular books of accounts from the financial year 2008-09. The amount as it 31.03.2009 was Rs. 85,23,720/- and as on September 2009, it was Rs. 90,23,720/-. It was argued that an amount of Rs. 65,23,720/- has been shown in the balance sheet of the assessee under the head "loans and advances" for the assessment year 20....
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....nt and simply said that this paper may relate to this page which is his ledger account and simply said that this paper may relate to his father. The assessee has not brought any evidences in this regard. These entries showing investment has not been shown by the assessee in his return of income and therefore, the unexplained investment of Rs. 9859212/- is added to the total income of the assessee." 22. During the argument before us, the ld. AR argued that no addition is warranted for the reason that it do not show any investment made by the assessee during the year. It was vehemently argued that there is no such plot at Rohtak Road, and no purchase of plot was made. Even, the department could not prove the existence and purchase of the said plot. It was argued that at the most it can be considered as some financial transaction as there was narration such as "lene baaki". It was argued that there are entries on the left side of the paper and on the right side of the paper and the AO has mislead himself to treat one side of entries as the unexplained investment of the assessee. He was also argued that the document do not belong to the assessee hence no addition in the hands of the....
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....ry from assessment years 2012-13 to 2014-15. This at the most could be a comprehensive sheet containing the transactions of the assessee over a period of three years. In such circumstances, the revenue has to brought on record, the sum and substance of such transactions mentioned on the document. We have specifically asked the revenue as to the statement recorded on the date of survey and the reply of the assessee pertaining to these transactions on the date of survey. We find no mention of statement recorded at the time of survey either on the assessment order or in the order of the ld. CIT(A). No statement recorded at the time of the survey has been produced even before us as to what the transactions pertain to. No enquiries have been conducted by the revenue to substantiate to unexplained investments. The figures pertaining to three different years cannot be brought to taxation without proving as to what type of transactions the document signifies. Hence, in the absence of any primary, secondary or corroborative evidences, no addition can be made based on the impounded document. The revenue could not even prove with certainty to whom the document belongs nor tested the han....