TaxTMI 
TaxTMI 
2022 (3) TMI 247
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....e purchases. The ACIT, Circle, Jhunjhunu after conducting local enquiry sent the Report dated 05.02.2014 to the AO wherein, it was stated that no such suppliers namely Radhey Shyam Building material CEERI Road and Kataria Cement Agency at Chirawa Road exist. 2.2. Vide notice dated 21.02.2014 an opportunity was provided to the Assessee to file its objection, in reply to which the Assessee simply stated that material purchased by the trust from two shops are still existing and the Assessee had paid them by cheques. Such explanation of the Assessee was not found convincing by the AO who ultimately made the addition of Rs. 1,03,94,934/- as per provision of section 69C of the Act to the extent of Rs. 49,71,668/- on account of Radhey Shyam Cement Agency and of Rs. 54,23,266/- on account of Kataria Cement Agency. 2.3. The AO during the assessment proceedings also observed that the Assessee trust had repaid loans amounting to Rs. 4.79 crores to Nishyan Farms (P) Ltd. and Rs. 25 lakhs to Nishyam Developers (P) Ltd., which were taken during the previous year relevant to Assessment Year 2009-10 and 2010-11 respectively. In reply the Assessee could not file plausible explanation and the ....
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.... Floor, 46, Amrit Nagar NDSE-II, Delhi during A.Y. 2010-11- was added by the A.O. u/s. 68 during the relevant years. 4. The Ld. Commissioner of Income Tax (Appeals) has erred in law and on facts in deleting the addition of Rs. 21,50,000/- on account unsecured loan u/s. 68 ignoring the fact that the assessee could not prove creditworthiness of the lenders during assessment proceedings. 5. The order of the ld. CIT(A) be cancelled and the order of the AO be restored." 5. Heard the parties and perused the material available on record. Ground Nos. 1 and 2 of the appeal relates to same issue with regard to the deletion of addition of Rs. 1,03,94,934/- on account of unexplained expenditure u/s. 69C of the Act. 5.1. It was claimed by the revenue/department that ld. Commissioner ignored the report of ACIT, Circle Jhunjhunu regarding non-existence of parties i.e. Radhey Shyam Building Material and Kataria Cement Agency from whom the Assessee has claimed to have purchased construction material. Further, the valuation report on the basis on which unexplained expenditure of Rs. 1,03,94,934/- has been deleted, was not substantiated by the Assessee during the assessment pr....
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....xpenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year: [Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income.] Here assessee had spent the expenditure on building constriction and source of the expenditure was proved from books of accounts. Expenditures were duly recorded in the books of accounts. There is no dispute about it. Only dispute is that suppliers could not be traced, the Assessee explained the possibility of non-tractability of suppliers. Assessee filed valuation report, map and copy of cash memos. Transactions were duly recorded in the books of assessee. Source of expenditure is out of funds available and duly verifiable from the books of assessee. Assessing officer has wrongly made the additio....
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....lied for charitable purpose. The A.O neither in assessment nor in remand report has never doubted the charitable purpose and application of funds. Hence, the contention of the revenue/department is untenable. 5.7. With regard to the non-submission of the valuation report before the AO, it was duly explained by the Assessee before the ld. Commissioner that during the assessment proceedings the said valuation report was not available, therefore, the Assessee filed the same along with application u/s. 46A of the IT Rules. Even otherwise said valuation report was forwarded to the AO for remand report and had duly been considered by the AO while conducting remand proceedings. Hence, the said contention also is untenable. Resultantly, ground Nos. 1 and 2 raised in the appeal by the revenue department stands dismissed. 5.8. Now coming to the ground No. 3. The revenue department has raised the issue that the ld. Commissioner has erred in law and facts in deleting the addition of Rs. 5,04,00,000/- on account of loan repayment u/s. 69 of the Act while ignoring the fact that the loans of Rs. 2,94,00,000/- and 2,99,50,000/- received from Nishyam Farms(P) Ltd. pertains to the Assessment Y....