TaxTMI 
TaxTMI 
2020 (11) TMI 927
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.... 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 appreciating the facts that the additions are made on the strength of impounded documen....
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....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 parties stands discharged and therefore no addition is tenable. It was argued that once the amount has been received by account payee cheques and the creditors have duly confirmed the tr....
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....ntrary 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 stock outstanding lying at the close of the year as per the balance sheet is Rs. 2,31,50,849/-. It was thus submitted that apparently, no disallowance could have been made in respect of interest paid on secured loan received from the bank as the enti....
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....hat 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 2012-13. There is no dispute that this is a financial transaction involving receipt of money either on cash basis or mercantile basis. 20. Heard. Since, the advance of Rs. 65,23,720/- has been duly reflected in the balance sheet, no addition on this account is required. That leaves us with the question whe....
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....ed 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 assessee is warranted. 23. On the other hand, the ld. DR argued that the regular flow of the accounts and the exactness of the figures will reveal that this is not a dumb document and that this document is a custodian of the business transactions and the investments of the assessee. It was argued that the onus is on the as....