TaxTMI 
TaxTMI 
TaxTMI 
2023 (2) TMI 569
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....at the CIT(A) erred in confirming addition u/s 68 on account of unsecured loan of Rs.8,00,000/- which may kindly be deleted. 4. That the CIT(A) erred in not refuting that the assessee has duly discharged his onus by placing various evidence before AO to justify these two loans of Rs.5,00,000/- & Rs.3,00,000/-. 5. That the CIT(A) erred in confirming disallowance of interest expenses of Rs.2,17,224/- holding it not for business purpose which may kindly be deleted. 6. That the CIT(A) erred in confirming addition of agriculture income of Rs.1,11,600/- which may kindly be deleted. 7. That the CIT(A) erred in confirming disallowance of various expenses of Rs.6,36,925/- made by AO rejecting the argument of AR to disallow proportionately. 8. The appellant craves leave to add, amend, alter, vary and / or withdraw any or all the above grounds of appeal." 2. At the outset of hearing, the Ld. Authorizing Representative (AR) for the assessee submits that he is not pressing the ground Nos. 2, 5 & 6 of appeal, which relate to penalty imposing under section 269SS disallowance of interest expenses and agriculture income. The Ld. Senior Departmental Representative (Sr. DR) for the Revenue....
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....iety. Further assessee failed to explain any reason as to why advances were shown as unsecured loan in the balance-sheet. On the basis of such observation, the Assessing Officer treated such advances / unsecured loan of Rs.21,72,500/- as not genuine and make addition on account of unexplained cash credits. 4. The Assessing Officer further noted that assessee has also shown unsecured loan of Rs.11,62,720/- form three persons. The assessee has submitted that he has received loan of Rs.3,62,720/- from Deepak Desani, Rs.5.00 lakh from Meenaben V Andani and Rs.3.00 lakh from Shivabhai Rajani. The Assessing Officer recorded that no confirmation, income tax return and bank statements were filed for verification of identity, creditworthiness and genuineness of those persons. Thus, the entire loan amount aggregating to Rs.11,62,720/- was also added as income of assessee. 5. The Assessing Officer further noted that assessee has debited expenses of Rs.6,39,925/- in his profit and loss account. The Assessing Officer issued show cause notice to substantiate such expenses. The assessing officer noted that no bills or vouchers were produced by assessee. In response to show cause, the assessee f....
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....n was carried out by Assessing Officer. For advance of Rs.6.10 lakh and Rs.6.12 lakh from Chhaganbhai Ramoliya and Shardaben Ramoliya against plot no.344, Narthan, the assessee stated that such advances are genuine for a single plot, that two purchasers are very common. From the appearance of "surname Ramoliya" the Assessing Officer presumed that they are brother and Bhabhi of assessee and such presumption of Assessing Officer is wrong and may have no relation with assessee. However, they are separate from business dealing, the Assessing Officer made addition by ignoring valid evidence. 7. On the unsecured loan of Rs.11,62,720 from three persons, namely; Deepak Desani, Meenaben V. Andani and Shivabhai Rajani, the assessee submitted that Assessing Officer remained silent on the detailed and elaborate evidence filed by assessee on 13.03.2015. The assessee produced the audited balance-sheet, bank statements of Shivabhai Rajani where the loan was received through account payee cheque which was given from their current bank account. The creditworthiness of Shivabhai Rajani was proved beyond doubt. For Meenaben V. Andani, the assessee submitted that he filed income tax return, balance-s....
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....rder. The Ld. CIT(A) on perusal of such details held that before him, copy of income tax return and balance-sheet of Deepak Desani is filed, wherein the loan given to assessee is reflected in his balance-sheet. Thus, the loan taken from Deepak Desani is established and Ld. CIT(A) accordingly directed the Assessing Officer to delete the addition of loan taken from Deepak Desani of Rs.3,62,720/-. 11. So far as two other loans are concerned, the Ld. CIT(A) held that details of such transaction are not filed before him. Thus, the addition with respect to loan from Shivabhai Rajani of Rs.3.00 lakh and from Meenaben V. Andani of Rs.5.00 lakh were confirmed. 12. On the addition / disallowance of expenses, Ld. CIT(A) after considering the submission of assessee held that assessee is an LIC agent and bound to incur expenses. In such business, no doubt he is required to pursue the customer as well as to hold meeting with them. The assessee is also required to maintain his office and staff for his assistance. The Ld. CIT(A) recorded that the assessee has not claimed rent and salary of employees and he has to establish that he maintains lease office and employed such staff. The Ld. CIT(A) al....
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....s in proving the identity, creditworthiness and genuineness of such transactions of advance from both Chhaganbhai Ramoliya and Shardaben Ramoliya. The Assessing Officer has not investigated the same. The Ld. AR for the assessee submits that assessee repaid the deposit / loan advance in subsequent assessment year i.e. in 2013-14 of Rs.4.50 lakh was repaid to Vishal Sakhiya on 28.02.2013 and Rs.5 lakh to Himmat S Kotadiya on 23.03.2013 and Rs.6.10 and Rs.6.12 to Chhaganbhai V. Ramoliya and Shardaben C. Ramoliya on 28.03.2013. Such repayments were made in cash accumulated withdrawal of Rs.10 lakh & Rs.15 lakhs from Federal Bank on 27.02.2013 and 22.03.2013 respectively, copy of bank statement, bank book along with cash book are filed on record. The Ld. AR of the assessee submits that assessment was completed on 23.03.2015 by giving defective show cause notice thereby in violation of principle of natural justice only on 09.03.2015. In absence of proper show cause, assessment is unsustainable in law. To support such submission, Ld. AR of the assessee relied on the decisions of Hon'ble jurisdictional High Court in the case of Zenith Processing Mils vs. CIT (1996) 219 ITR 721 (Guj). ....
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....d against the sale of commercial as well as residential properties -one of the property against. The Assessing Officer while making such addition in para-8.3 of assessment order specifically recorded that assessee failed to establish whether any property was finally sold to any persons from whom the advance was received or if not what was reason for cancellation. No satakhat / agreement for alleged contract of sale of all the properties as submitted till assessment was completed on 23.03.2015. Before Ld. CIT(A), the assessee made elaborate submission, which we have already recorded above. The assessee stated that Assessing Officer has not investigated the matter properly. We find that the Ld. CIT(A) after considering the submission of assessee held that claim of assessee do not inspire confidence as no explanation was given as to why all properties were offered for sale and advances were received in cash. The assessee has no explanation about such fact as to why all the properties were put on sale. Before us, besides repeating the similar stand, which was submitted before Assessing Officer, the ld AR for assessee submitted that the said advances were repaid in next/ subsequent year....
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....n 25.03.2015, copy of ledger account highlighting the entries of repayment through cheque, is filed. The Assessing Officer has not investigated the fact either by issuing notice under section 133(6) or 131 of the Act to the lenders. Once the assessee has discharged his onus by furnishing required details, the onus shifts on the assessing officer. The assessing officer made additions without investigating the facts or bringing any adverse evidence against the assessee and the additions are liable to be deleted. To support such submission, Ld. AR of the assessee relied on the following decisions: * CIT vs. Chankya developers 43 taxmann.com 91 (Guj) * ACIT vs. Hanuman Agrawal 159 ITR 150 (Pat) * CIT vs. Orissa Corporation Pvt. Ltd. 159 ITR 78 (SC) * Rohini Builders vs. DCIT 76 TTJ 521 (AHD-ITAT) confirmed by Hon'ble Gujarat High Court in 256 ITR 360 (Guj) 18. On the other hand, Ld. Sr-DR for the Revenue supported the order of lower authorities. The Ld. Sr-DR for the Revenue submits that before Assessing Officer no confirmation or relevant details like income tax return and bank statement to prove the identity, creditworthiness and genuineness of the lenders were furnished....
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.... to substantiate the transaction of loan. However, before Ld. CIT(A) the assessee furnished detailed of loan transaction as has been recorded in para-5.2.2 of his order. However, no investigation of assessee carried out either by Ld. CIT(A) or through office of Assessing Officer. Therefore, in absence of any adverse evidence, the disallowance of loan when the assessee has discharged his primary onus in furnishing requisites details of lender and assessee was not justified. Hence, we direct the Assessing Officer to delete the addition of Rs.5.00 lakh and Rs.3.00 lakh respectively on account of loan received from Meena V. Andani and Shivabhai Rajani. We order accordingly. These grounds No.3 & 4 of assessee is allowed. 22. Ground No.7 relates to disallowance of various expenses. The Ld. AR of the assessee submits that assessee claimed various expenses like salary of staff of Rs.3.60 lakh depreciation on motor car, two wheelers, electric consumption, telephone bill, software expenses, insurance expenses and other miscellaneous expenses. Bifurcation of such expenses were provided to the lower authorities. The assessee consistently submitted that motor car and other vehicle were used fo....