AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (3) TMI 757
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....n which net profit declared, before remuneration to partners, was Rs.23,70,039/- . The total income returned to tax was Rs.9,18,841/-. During assessment proceedings several additions were made to the income of the assessee totaling in all to Rs.13,15,38,617/- which majorly included addition of Rs.11,86,87,480/- being current liabilities reflected in the books of the assessee, added for the reason that the genuineness of the credit balance remained unexplained. Minor additions made were on account of disallowance of building construction expenses & depreciation on motor cars amounting toRs.59,10,574/-& Rs.14,79,549/- respectively. The matter was carried in appeal before the ld.CIT() who deleted the entire addition made on account of unexplained credit balance of Rs.11.86 crores except for an amount of Rs.70,000/-.With respect to the disallowance made of building construction expenses the ld.CIT(A) deleted majority of the disallowance of Rs.50,46,501 and confirmed only the balance of Rs.8,64,073/-; so also, with respect to the disallowance of car depreciation the ld.CIT(A) deleted disallowance of Rs.8,63,961/- and upheld the balance of Rs.4,67,633/-. Aggrieved by this order of the ld....
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....urther, these were not squared-up in subsequent years nor these were found part of the opening balance. 3. The Ld. CIT(A) has erred in taking the opening balance at Rs.3,62,12,517/- in Annexure 'C' of his order, whereas on totaling, the actual opening balance comes to Rs. 3,10,87,717/- and thus granted excess relief amounting to Rs.51,25,800/-. 4. On the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax(Appeals)-XV, Ahmedabad ought to have upheld the order of the Assessing Officer on above issues in accordance with above." 4. The ld.DR pointed out that Ground No.1(a) to (c) related to same issue i.e. deletion of credit balance pertaining to sundry creditors amounting in all to Rs.1,19,93,502/-. ld.DR first drew our attention to the facts of the case from the assessment order (para 3.2) wherein he pointed out that the AO had noted from Schedule-10 of Audit Report that the assessee had shown current liabilities as follows: Sundry creditors Rs.2,32,06,459/- Deposit of Shivranjani Rs.9,16,81,021/- Advance from Shivranjani Rs. 38,00,000/- Total Rs.11,86,87,480/- In the absence of any details submitted by the assessee to establish gen....
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....evious year, payments during previous year, other debits and final balances in respect of sundry creditors of Rs.2,32,06,458.55/- which was subjected to remand report. The remand report and rejoinder report are already discussed. The details / evidences with this list was already examined by A.O. during remand proceedings. The further details and evidences as submitted by appellant with rejoinder to remand report were examined by me along with the details & evidences filed earlier in this regard and this Ann. A is prepared on above discussed parameter. It is evident from the list submitted earlier by appellant with submission dt. 09/07/12 and subjected to remand report (page 18-19) that there are sundry creditors of Rs. 2,34,35,970.55/- as on 31/03/09 while in 4 cases on account of debit of Rs. 2.29.512/-, the net sundry creditor were of Rs. 2,32,06,458.55/-. It is in this regard the Ann. A reflect the total amount of sundry creditor at Rs. 2,34,38,053/-. From this analysis of Annexure-A following discrepancies were culled out: (i) Sr. no. 2 Shri Anand V. Dave whose bill for consultancy (solicitor and advocate) dt. 1G/OG/08 for Rs. 3,82,024/- is credited and remained outstanding.....
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..../basis of the addition made by AO, deleted by Ld.CIT(A) and the arguments of the Revenue against the order of the Ld.CIT(A).He stated that in accordance with the said direction the arguments against the deletion of addition by the Ld.CIT(A) had been summarized in a chart giving details of the basis on which the AO in his remand report had found these sundry creditors to be not genuine, the basis on which the ld.CIT(A) had held them to be genuine and also detailing his arguments against the finding of the ld.CIT(A). Copy of the chart was filed before us and is reproduced as under: Chart giving all relevant details in respect of each and every Creditors which is in dispute - M/s Shital Builders PAN ABGFS5271G - AY 2009-10 Disputed Creditors as per Grounds of Appeals S No. Name Amount Remarks Observation in Assessment order Observation in Remand Report CIT (A)'s Stand Narration as to what is the discrepancy leading to Revenue's appeal before ITAT Attachment Copy of bills etc. establishing the discrepancy with proper referencing. 1 Bharatbhai Rayabhai Mer 662489 The pattern, writing of the bills is similar with that....
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....Y 2008 to 2010-11 is enclosed herewith as per Annexure 3. Copy of invoice is attached as per Annexure 4. Annexure 2,4,6,8,10,12,14,16,18 and 21 establishes the similar pattern, writing etc. 3 Gulabsinh Amarsingh 92378 The pattern, writing of the bills is similar with that of other creditors. As above NO PAN and entry not confirmed by the creditors as per copy of ledger submitted by the assessee. Assessee has submitted name, address, copy of bill, confirmation and payment is made through bank. There is sufficient evidence for confirming the balance as on 31.03.2009 and disallowance and addition made in respect of creditor is not justified and not sustainable. Same as above. The pattern, writing of the bills is similar with that of other creditors. Copy of ledger from the books of the assessee in case of creditor for FY 2008 to 2010-11 is enclosed herewith as per Annexure 5. Copy of invoice is attached as per Annexure 6. Annexure 2,4,6,8,10,12,14,16,18 and 21 establishes the similar pattern, writing etc. 4 JigneshbhaiLalji bhai Mer 111849 The pattern, writing of the bills is similar with that of other creditors. As above NO PAN and entry not confirmed by the creditors ....
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.... Assessee has submitted name, address and payment is made through bank. There is sufficient evidence for confirming the balance as on 31.03.2009 and disallowance and addition made in respect of creditor is not justified and not sustainable. Same as above. The pattern, writing of the bills is similar with that of other creditors. Copy of ledger from the books of the assessee in case of creditor for FY 2008 to 2010-11 is enclosed herewith as per Annexure 13. Copy of invoice is attached as per Annexure 14.Annexure 2,4,6,8,10,12,14,16,18 and 21 establishes the similar pattern, writing etc. 8 Shalibhadra Traders - Balasinhor Kheda 2925 The Handwriti ng is identical with that of the bill of Shantinath Transport of Jivraj Park, Ahmedabad. As above NO PAN and entry not confirmed by the creditors as per copy of ledger submitted by the assessee. Assessee has submitted name, address, copy of bill and payment is made through bank. There is sufficient evidence for confirming the balance as on 31.03.2009 and disallowance and addition made in respect of creditor is not justified and not sustainable. Same as above. The handwriting is identical with that of the bill of Shantinath Transpo....
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....08 to 2010-11 is enclosed herewith as per Annexure 20. Copy of invoice is attached as per Annexure 21. Annexure 2,4,6,8,10,12,14,16,18 and 21 establishes the similar pattern, writing etc. 12 Ankit Traders 11564 No bills submitted, No confirmation before A.O. As above On perusal of the Ledger accounts furnished by assessee during the course of appellate proceedings, Entry is not confirmed by the Creditor. Assessee has submitted name, address, copy of bill and payment is made through bank. There is sufficient evidence for confirming the balance as on 31.03.2009 and disallowance and addition made in respect of creditor is not justified and not sustainable. Same as above. No bills submitted. No confirmation filed before the A.O. The said fact is also mentioned in Anne-A of CIT(A)'s order. Copy attached as per Annexure 19. Annexure 2,4,6,8,10,12,14,16,18 and 21 establishes the similar pattern, writing etc. 13 251100 No bills submitted, No confirmation before A.O. As above NO PAN and entry not confirmed by the creditors as per copy of ledger submitted by the assessee. Outstanding balance except having ledger account and contention with details that such outstan....
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.... fact is also mentioned in Anne-A of CIT(A)'s order. Copy attached as per Annexure 22. 17 Innovative Infra Pvt. Ltd. 645417 No confirmation, No bills submitted before A.O. As above On perusal of the Ledger accounts furnished by assessee during the course of appellate proceedings , Entry is not confirmed by the Creditor. Assessee has submitted name, address, copy of bill and payment is made through bank. There is sufficient evidence for confirming the balance as on 31.03.2009 and disallowance and addition made in respect of creditor is not justified and not sustainable. Same as above. No bills, No confirmation before the A.O. The said fact is also mentioned in Anne-A of CIT(A)'s order. Copy attached as per Annexure 22. 18 Jainam Traders 76924 No bills, NO PAN, No confirmation before AO. As above NO PAN and entry not confirmed by the creditors as per copy of ledger submitted by the assessee. Assessee has submitted name, address, copy of bill, confirmation and payment is made through bank. There is sufficient evidence for confirming the balance as on 31.03.2009 and disallowance and addition made in respect of creditor is not justified and not sustainable. Same....
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....e and addition made in respect of creditor is not justified and not sustainable. Same as above. No bills, No PAN, No confirmation before the A.O. The said fact is also mentioned in Anne-A of CIT(A)'s order. Copy attached as per Annexure 22. 23 Maruti Traders 806225 No bills, NO PAN, No confirmation before AO. As above NO PAN and entry not confirmed by the creditors as per copy of ledger submitted by the assessee. As against the purchase of cement during month of September 2008, total o/s balance was paid by cheque of Rs. 5 Lakh on 28.05.2009 and Rs. 259000/- on 02.06.2009 and Rs. 47225/- on 07.11.2009 and cannot be held as unexplained current liabilities. There is sufficient evidence for confirming the balance as on 31.03.2009 and disallowance and addition made in respect of creditor is not justified and not sustainable. Same as above. No bills, No PAN, No confirmation before the A.O. The said fact is also mentioned in Anne-A of CIT(A)'s order. Copy attached as per Annexure 22. 24 Nishant B Acharya 72500 No bills, NO PAN, No confirmation before AO. As above NO PAN and entry not confirmed by the creditors as per copy of ledger submitted by the assessee. Ass....
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....nt is made through bank. There is sufficient evidence for confirming the balance as on 31.03.2009 and disallowance and addition made in respect of creditor is not justified and not sustainable. Same as above. No bills, No PAN, No confirmation before the A.O. The said fact is also mentioned in Anne-A of CIT(A)'s order. Copy attached as per Annexure 22. 9. Ld.DR stated that he relied on the said chart for his arguments, which briefly put were to the effect that while the ld.CIT(A) had held all the sundry creditors to be genuine, finding that the assessee had submitted all details as to names, addresses of the creditors, their copies of bills and also the fact that the payment was made through bank, the ld.CIT(A) had conveniently ignored the fact that the AO had noted the bills raised by these parties to be fabricated, being drawn in identical pattern with common hand-writing and also that no third party evidence to prove genuineness of the balances was furnished by the assessee. 10. The ld.AR countered by making several arguments, viz. i) On the challenge of the Department to the finding of the ld.CIT(A) that the credit balance of sundry creditors were genuine, the ld. Coun....
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....of A/c for payment verification is enclosed. PAN:AAFF A3859C. 5 Arth Communication 28 11948 Not Confirmed by the Creditor Name & complete address & Phone No. along with copy of bill of the supplier submitted. Payment duly made by A/c Payee Cheques in subsequent years. Copy of A/c for payment verification is enclosed. PAN:AACP Z8943K 6 Art Lime Images P. Ltd 30 59247 Not Confirmed by the Creditor Name & complete address & Phone No. along with copy of bill of the supplier submitted. PAN : AADCA 9653 P of supplier also submitted. Payment duly made by A/c Payee Cheques in subsequent years. Copy of A/c for payment verification is enclosed. 7 Ashok Thakkar & co 32 11236 PAN submitted is in the name of Individual Auditors Remuneration. Address & PAN of proprietor Ashok Thakkar was submitted. PAN:ABA PT5307J. 8 Babulal R Patel Bricks 33 125600 PAN submitted is in the name of Charbhuja Bricks Mfg. Co Name & complete address & Phone No. along with copy of bill of the supplier sub....
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....with copy of bill of the supplier submitted. Payment duly made by A/c Payee Cheques in subsequent years. Confirmation is enclosed. PAN: AGQPV9254R. 17 Gayatri Corporation 49 12253 No PAN, Not Confirmed by the creditor. Name & complete address & Phone No. along with copy of bill of the supplier submitted. Payment duly made by A/c Payee Cheques in subsequent years. Confirmation is enclosed. PAN: AADFG5230F. 18 Govindbhai M. Jograna 51 35903 No PAN, Not Confirmed by the creditor. Name & complete address along with copy of bill of the supplier submitted. Payment duly made by A/c Payee Cheques in subsequent years. Copy of A/c for payment verification is enclosed. PAN:AKPPJ7831H. 19 Gujarat Steel & Pipes 53 366894 No PAN, Not Confirmed by the creditor. Name & complete address along with copy of bill of the supplier submitted. Payment duly made by A/c Payee Cheques in subsequent years. Copy of A/c for payment verification is enclosed. PAN:AABFG7077N 20 GulabsinhAmarsinh 55 92378....
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....t verification is enclosed. 29 Jay Chamunda Transport 70 20400 No PAN, Not Confirmed by the creditor. Name & complete address along with copy of bill of the supplier submitted. 30 Jay Corporation 72 314347 No PAN, Not Confirmed by the creditor. Name & complete address along with copy of bill of the supplier submitted. Payment duly made by A/c Payee Cheques in subsequent years. Copy of A/c for payment verification is enclosed. 31 Jay Madi Trading Co 74 417199 PAN of Vasantbhai S Patel (AHWPP2907L) Proprietary Concern, Pan Card copy submitted. Payment duly made by A/c Payee Cheques in subsequent years. Copy of A/c for payment verification is enclosed. PAN: AHWPP2907L. 32 Jayshree Rameshwar Bricks 76 38700 No Pan/ Address, &no Transaction during Confirmation submitted by the assessee. Opening Balance. Confirmation is enclosed. PAN: AAMPP2527K. 33 Jay shreesadhi Transport 77 1413 No Pan/ Address, &no Transaction during Co....
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....bsp; 42 Laxmi Trident 91 123279 No PAN, Not Confirmed by the creditor. Name & complete address along with copy of bill of the supplier submitted. Payment duly made by A/c Payee Cheques in subsequent years. Copy of A/c for payment verification & contra confirmation is enclosed. PAN: AAEFL1373M. 43 Lobanbhai K Mavee(Bhagat) 93 129142 No Confirmation given Name & complete address along with copy of bill of the supplier submitted. PAN of the supplier also submitted. Payment duly made by A/c Payee Cheques in subsequent years. Copy of A/c for payment verification is enclosed. PAN: AWAPM3120D. 44 Mahavir Enterprise 95 47250 No PAN, Not Confirmed by the creditor. Name & complete address along with copy of bill of the supplier submitted. Payment duly made by A/c Payee Cheques in subsequent years. Copy of A/c for payment verification & contra confirmation is enclosed. PAN: AJYPM0162C. 45 Mahavir Sales Agency 97 1014031 No PAN, Not Confirmed by the creditor. Name & complete address along ....
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....e address along with copy of bill of the supplier submitted. PAN of the proprietor also submitted. Payment duly made by A/c Payee Cheques in subsequent years. Copy of A/c for payment verification is enclosed. PAN:APHPP8800B. 54 Prakash Corporation 115 1410243 PAN is not in the name of Prakash Corporation Name & complete address along with copy of bill of the supplier submitted. PAN of the proprietor also submitted. Payment duly made by A/c Payee Cheques in subsequent years. Copy of A/c for payment verification is enclosed. PAN:ADW PD9348K. 55 Radha Krishan Traders 119 350 No PAN, Not Confirmed by the creditor. Payment duly made by A/c Payee Cheques in subsequent years. Copy of A/c for payment verification is enclosed. PAYMENT MADE 56 Riddhi Sales Corporation 120 9425 No Pan/ Address, &no transaction during the year. Opening Balance Confirmation is enclosed. PAN: AMKPP9771B. 57 SamjubenGandabhai 121 3203 No Pan/ Address, &no Confirmation submitted by the assessee. Staff ....
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.... No PAN, Not Confirmed by the creditor. Name & complete address along with copy of bill of the supplier submitted. Payment duly made by A/c Payee Cheques in subsequent years. Copy of A/c for payment verification is enclosed. 67 Shree Vallabh Traders 143 2170 No PAN, Not Confirmed by the creditor. Name & complete address along with copy of bill of the supplier submitted. Payment duly made by A/c Payee Cheques in subsequent years. Copy of A/c for payment verification is enclosed. 68 S N Enterprise 145 444444 PAN submitted is not in the name of S N Enterprise. Name & complete address along with copy of bill of the supplier submitted. PAN of the proprietor also submitted. Payment duly made by A/c Payee Cheques in subsequent years. Copy of A/c for payment verification is enclosed. PAN: ACTPJ8197L. 69 Sugam Engineers 150 2025 No PAN, Not Confirmed by the creditor. Name & complete address along with copy of bill of the supplier submitted. Payment duly made by A/c Payee Cheques in subsequent years. Copy of A/c for payment verific....
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....identical issue has dismissed the appeal filed by the Revenue as under:- "1. The assessee filed his return for the Assessment Year 2001-02, declaring an income of Rs.4,10,544/-. This return was processed under Section 143(1)(a) and the case was selected for scrutiny thereafter. Notice under Section 143(2) was issued to the assessee. The Assessing Officer doubted the veracity and genuineness of sundry creditors of an amount of Rs. 1 lakh and above, as shown by the assessee in its books of accounts. He found that those parties/sundry creditors were neither the income tax assessee nor having PAN numbers. According to the Assessing Officer, the genuineness of the secured creditors was in doubt. The assessee also failed to produce the books of accounts, entries sales and purchase bills in support of his case. In these circumstances, the Assessing Officer disallowed the sundry creditors and added the amount in the income of the assessee under Section 68 of the Income Tax Act. The appeal filed by the assessee before the CIT(A) against the aforesaid order, was also dismissed. However, on further appeal before the ITAT, the assessee had succeeded, inasmuch as his appeal was allowed by the....
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.... the construction of the road. The amounts in question represented purchases made on credits. According to Section 68 of the Act, where any sum is found credited in the books of account of an assessee maintained for any previous year and the asseessee offers no explanation about the nature and source of the same or the explanation offered by him is not satisfactory in the opinion of the Assessing Officer, the sum so credited may be charged to income tax as the income of the assessee of that previous year. It has been categorically recorded by the Tribunal that the provisions of Section 68 of the Act were clearly not attracted to the amount representing purchases made on credits. Further the trade creditors in the earlier years i.e. assessment years 2007-08 and 2008-09 stood accepted in scrutiny assessments. Thus, the genuineness of expenses under consideration could not be doubted. The relevant findings recorded by the Tribunal in this regard read thus:- "Having heard the rival contentions in the light of the material available on record, it is seen that in para-3 of the assessment order, the AO observed that the assessee had shown numerous sundry creditors along with details, as....
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....as squarely attracted in the present case and the assessing authority has rightly added the two amounts at the hands of the respondent-assessee. According to him Section 68 of the Act also covers up the case of purchases made on credit. 8. The submission is misconceived. The Tribunal has recorded a categorical finding of fact based on appreciation of materials and evidence on record that the AO had accepted the purchases, sales as also the trading result disclosed by the respondent-assessee. It had recorded a finding that the aforesaid two amounts represented the purchases made by the assessee on credit and, therefore, the provisions of Section 68 of the Act could not be attracted in the present case. We fully agree with the view taken by the Tribunal on this issue, inasmuch as, on the basis of the findings recorded by it that these two amounts represented purchases made by the respondent-assessee on credit and the purchases and sales having been accepted by the Department, the question of addition of the aforesaid two amounts under Section 68 of the Act did not arise inasmuch as the provisions of Section 68 of the Act would not be attracted on the purchases made on credit. 9. ....
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.... has been making purchases and all the payments has been made though account payee cheques against specific bills and also mentions vouchers numbers. The bills of these parties contain the entire details of purchases made by the assessee. Once from all the parties assessee was having regular business transaction and regular payment has been made from these parties, duly backed by bills and payment vouchers, then where is the question of disallowance. If the purchases made from these parties have been duly accounted for and are part of trading account and neither the debits side nor the credit side of the trading results have been disturbed nor books of accounts have been rejected, then no addition on account of sundry creditors can be made. Accordingly, the addition as confirmed by the Ld. CIT( A) is confirmed and additions stands deleted." 12. To this, the ld.DR countered by saying that the AO had not invoked section 68 of the Act. 13. The ld. Counsel for the assessee again countered by drawing our attention to page no.33 of the CIT(A)'s order wherein the ld.CIT(A) had dealt with the issue of application of provision of law under which the addition was made , pointing out that t....
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....finding of the ld.CIT(A) to which our attention was drawn by both the parties at para 5.2.2. (g) & (h) deleting the entire disallowance. We have gone through the details furnished in tabular form by the assessee to the ld.CIT(A) establishing genuineness of these sundry creditors to counter the finding of the AO in remand , which was placed before us at PB Page Nos.180 to 190 reproduced above. We have also gone through the details submitted by the ld.DR before us in tabular form to challenge finding of the ld.CIT(A) deleting the disallowance made. A perusal of all of the above reveals that the assessee had filed names, addresses and copies of the bills, and also established the fact of payments made to these parties through banking channels. The Revenue does not challenge the above except for the fact that the bills raised by these sundry creditors appear to be manipulated or bogus and the reason /basis for arriving at this finding by the AO is that the bills were found to be identical in pattern and in common hand writing. For this reason they were found by the AO to be not reliable piece of evidence for granting relief. Further, the Department's plea is also that no third party ev....
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....purchases whose balances are outstanding at that end of the year. The department has therefore taken a contradictory stand on the issue by disallowing only outstanding balances of sundry creditors finding them to be bogus. Treating the purchases as bogus, even otherwise can attract disallowance only of purchases made during the year. If the outstanding balances contain the balance relating to the preceding year, the addition of these opening balance cannot be made by treating the purchases of the current year to be bogus. The disallowance pertaining to opening outstanding balances can be made only in the year in which the purchases relating to them are booked by the assessee; 20. On the invocation of section 68 of the Act for unexplained credit balances deemed to be income of the assessee, addition on this account in any case could have been made only of balances pertaining to the impugned year. 21. Invocation of section 41(1) of the Act for cessation of liability could not have been possibly done on balances pertaining to the impugned year considering the very short period of the liability for treating it as ceasing to exist. The AO has neither specified the section being invo....
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....der: Sr. No. Name of the person whom has given booking advance Page No. Credit Balance as on 31.3.09 (Rs.) PAN Name & address submitted Amt. of New Deposit received during the FY 2008-09 Whether confirmation of party submitted Whether amount of deposit repaid or squared up by sale of property in the subsequent year Remarks 9 Devensinh C Vaghela 177 2500000 ADNPV3956A Yes 2500000 Yes 28 Leesa Security P Ltd. 231 3839950 AABCL4624R Yes 3839950 Yes 36 Samir Chandra Nair 267 5500000 ABAPN3285F Yes 5500000 Yes 26. Referring to the same, he pointed out that the ld.CIT(A) deleted the disallowance noting that name, address, PAN and confirmation of the parties was submitted by the assessee. The ld.DR contended that the finding of the ld.CIT(A) was contrary to what the AO had noted in the assessment proceedings with respect to the said parties stating clearly that no PAN or address or no confirmation with respect to these parties had been submitted by the assessee. He drew our attention to the page no.18 and 20 of the CIT(A) order containing the report of the AO in remand proceedings with respect to the said p....
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....inted out to us. We have noted that the ld.CIT(A) has deleted the addition with respect to the aforesaid unsecured loans finding that all necessary details and confirmation of the parties was filed by the assessee and nothing adverse was found by the AO. The ld.CIT(A) has also, we have noted, dealt with the remand report of the AO wherein he had noted no information, details or confirmations being filed with respect to the said parties, stating that the AO had incorrectly noted the said facts. The ld.DR was unable to controvert this factual finding of the ld.CIT(A) that the assessee had furnished all necessary details and evidences to establish genuineness of the unsecured loans relating to the aforesaid three parties with evidences. In view of the above, we see no reason to interfere in the well reasoned order of the ld.CIT(A), passed after appreciating all relevant facts relating to the issue. Ground no.2 raised by the Revenue is dismissed. 29. Ground No.3 raised by the Revenue, it was pointed out, relates to discrepancy in totaling of opening balance noted by the ld.CIT(A) in Annexure-C of loans and advances. It was pointed out that while dealing with the issue of addition made....
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....mercial vehicle and higher depreciation was admissible on it." 32. As is evident from the grounds, the assessee has challenged the confirmation of addition with respect to the sundry creditors, expenses for building construction and motor car depreciation. 33. The findings of the ld.CIT(A) at para 5.2.1 (p) of his order upholding the addition on account of sundry creditors of Rs.70,000/- is as under: "(p) In conclusion, out of the total addition of Rs.11,86,87,480/- as per para 5.2.2(h) the outstanding creditors of Rs. 2,34,38,053/- were held to be genuine creditor for which A.O. was not justified in making addition u/s 68 of the Act. ln respect of 26 parties from unsecured loan outstanding amounting to Rs. 2,87,45,854/-, the A.O. has no adverse comment in remand report and as per para 5.2.2(1) the same were held as genuine and explained deposit. In respect of 44 parties with total unsecured loan 7 advances 7 deposit of Rs. 6,29,34,4677-, ten parties having outstanding opening balance of Rs. 74,27,1317- were found to be having no details but as per para 5.2.2 (k) the A.O. has to initiate proper proceedings in the year when such loan/deposit were accepted and addition u/s 68 for....
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....g bill No.3 dated 09.06.2008 for an amount of Rs. 1,42,385.35. It was contended by appellant that detail is available in sundry creditors confirmation. At page 79 of the paper book ledger account of this party reflect the amount credited of Rs. 1,47,852 on 09.06.2008 and deduction of IDS on labour at Rs.3404 on 16.11.2008 being debited. But, no corresponding bill for this expenditure is there. Further, in rejoinder to remand report vide 'SC-42' a contra account with confirmation from the party with PAN ASQPM 4830 N was submitted for the period 10.05.2008 to 01.08.2010 where this entry of Rs.1,47,852 and IDS entry of Rs.3404 is mentioned. I am not inclined with these evidences for allowability of difference in bill of Rs.5467 (147852 -142385). As per settled legal proposition, any expenditure or part thereof as claimed by appellant u/s.37(1) of the Act has to be duly supported by bills or vouchers to reflect that the same is business expenditure and wholly and exclusively incurred by appellant for business. By deducting IDS out of it and by producing confirmation from the party does not absolve the appellant from the onus to furnish / submit necessary bills related to such e....
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....8 to 01.04.2011 with PAN AAGFJ 4082 R. But, as discussed at (i) & (iii) above, such ledger account and confirmation does not discharge the appellant from the onus as casted u/s.37(1) of the Act. It is therefore, the disallowance and addition so made of Rs.5,10,500 is upheld and confirmed. (vi) In respect of balance parties the appellant vide page No.289 to 307 submitted copies of bills with name and address of labour parties. In some of the cases PAN is also provided on the bills itself which in most of the cases being same party for multiple expenditure (Page 289) the PAN, confirmation is available in the details of sundry creditors. It is therefore, the addition and disallowances for those expenditure as made by A.O. is neither justified nor sustainable. In conclusion the additions of Rs.8,64,073 (5467 +65513 + 78000 + 204593 + 51050) are upheld and confirmed as discussed above. The A.O. is directed to delete the balance disallowance and addition of Rs.50,46,501 (5910574 - 864073). The appellant gets part relief." 37. We have gone through order of the Ld.CIT(A) and have noted that the disallowance was upheld by him in the absence of any substantiation of the same by the assess....
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....t in the absence of any evidence to substantiate that these vehicles were wholly and exclusively used for the purpose of business, the depreciation so claimed be allowed in full on account of nature and volume of appellant's business and tax audit report. As per settled legal proposition the onus is on assessee to establish with evidences for the claim of depreciation that such assets were wholly and exclusively used for the purpose of business or partly used for the business. Reference is invited to Hon'ble Madras High Court decision in the case of New Ambadi Estate Pvt.Ltd. v. State of Tamil nadu (2002) 256 ITR 0064. It is therefore a reasonable disallowance out of such depreciation is justified. Further, in the case of Toyota Altis car' the appellant claimed depreciation of Rs.3,28,500 being 50% of eligible claim being the vehicle was acquired after 30.09.2009 i.e. owned and used for less than 180 days. But, the rate of depreciation adopted is 50% at the place of 15% resulting into excess claim of Rs.2,29,950.(3,28,500 - 7.5% of 13,14,000). The appellant has not submitted any explanation about adoption of such higher rate of depreciation of 50% which is as per I.T.Ru....