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TaxTMI 
TaxTMI 
TaxTMI 
2015 (11) TMI 1887
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....efly stated facts are that the AO during the course of assessment proceedings made addition on account of sundry creditors from whom the assessee purchased goods. The assessee has purchased heavy earth moving machineries from the following parties: Sl. No. Name Address provided by the assessee Opening Balance Addition Subtraction Closing Balance 1. D. S. Enterprises 2, Canning St., Kol- 700001 0 29.08.900 0 29.08.900 2. Durga Trading Corporation 309, B. B. Ganguly St., 1st floor, Kol-700012 0 14,56,000 0 14,56,000 3. Gem Traders P-41, Princep St., Kol- 700072 0 32,68,754 0 32,68,754 4. Kalimata Trading Complex Salap, Kalitala, Howrah- 711409 0 32,91,600 0 32,91,600 5. Radhika Steel Syndicate Kona, Benara Road, Howrah-711114 0 22,54,360 0 22,54,360 6. Sangeet Rahini Corporation 62, Bentinck St., Kolkata-69 0 9,10,000 0 9,10,000 7. Seema Enterprise 62, Bentinck St., Kolkata-700069. 0 13,52,000 0 13,52,000 The AO required the assessee to file the de....
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....of Rs.7,50,000/- ignoring the material facts and circumstantial evidence brought on the assessment records of the assessee." 6. We have heard rival submissions and gone through facts and circumstances of the case. Briefly stated facts are that the assessee has taken unsecured loans from the following persons: Sl.No. Name Opening Balance Addition Interest TDS Closing Balance 1. Bina Chaudhury 0 400,000 395 0 400,395/- 2. Brijmohan Tibrewal 0 350,000 394 0 350,345/- The AO required the assessee to provide the names, address along with evidence to prove the creditworthiness of the above unsecured loans and both the creditors have confirmed giving above loans to the assessee but assessee failed to produce the evidence in respect of creditworthiness of these parties and in the absence of the same, the AO added these unsecured loans of Rs.7.5 lacs to the returned income of the assessee. Aggrieved, assessee preferred appeal before CIT(A), who deleted the addition by relying on the decisions of Hon'ble Gujarat High court in the case of DCIT v Rohini Builders (2002) 256 ITR 360 (Guj). 7. We find ....
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....rcumstantial, cannot be brushed aside summarily. No enquiry is on record, as per the assessment order, wherein the A.O. could have been said to have negated even this circumstantial evidence. As per the A.O, only primary evidence in the nature of return of income/ balance sheet/P&L account is acceptable as evidence of creditworthiness and none of these have been filed by the appellant in respect of these parties. The A.O. states that his view is based on the pronouncements of various Courts including the Hon'ble Supreme Court. If the A.O. states that his stand, that, even where confirmations of purchase transactions are available on record, a buyer has to, suo moto, produce IT Returns/Balance Sheets P&L accounts of the seller as proof of such sellers' creditworthiness, is based on judicial decisions then citations of such judicial decisions become necessary. However, no such citation has been given. In this case, in my opinion, if the A.O. felt that primary evidence of the creditworthiness was lacking, I do not see what prevented him from raising further queries. The addresses and the PA Nos. of these parties were available with him. Yet, for reasons best known to him, he i....
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....he present case only exception is M/s. Vishal Enterprises wherein it has not verified the veracity of the transaction. Hence, qua this only, we set aside the matter to the file of the AO so that assessee can prove the veracity of the transaction and for the balance purchases, we confirm the order of CIT(A) and this issue of revenue's appeal is partly allowed. 11. The next issue in this appeal of revenue is against the order of CIT(A) deleting the addition made by AO on behalf of disproportionate payment of expenses made to persons specified u/s. 40A(2)(b) of the Act. For this, revenue has raised following ground no.4: "4. That the Ld. CIT(A) has erred in deleting the addition on account of u/s. 40A(2)(b) of Rs.29,50,000/- ignoring the material facts and circumstantial evidence brought on the assessment records of the assessee." 12. Briefly stated facts are that the AO noticed from audit report that the expenditure of Rs.2,29,72,459/- were paid to related persons specified u/s. 40A(2)(b) of the Act and according to him to block the possible leakage in the revenue, he disallowed on ad-hoc basis at Rs.29.50 lacs as under: "To plug the possible leakage in the re....
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....t has issued Form 15-I for non-deduction of TDS on these truck hire charges and these persons submitted the Form 15-I before DCIT, Circle-2 but not before CIT concerned. It is an admitted position that the recipients have issued Form 15-I and assessee has received the sum and not deducted the TDS on truck hire charges paid to them. Once the assessee receives Form 15-I he is not obliged to deduct TDS but to make payment without deduction of TDS. This view of ours is fortified by the decision of Coordinate Bench of Mumbai Tribunal in the case of Vipin P. Mehta in ITA No.3317/M/2010 dated 20th May, 2011, wherein it is held as under: "6.We have carefully considered the facts and the rival contentions. Section 194A provides for deduction of tax from the interest paid by the assessee, at the appropriate rate. Section 197A(lA) provides that notwithstanding anything contained in section 194A no deduction of tax shall be made under the section if the payee of the interest furnished to the person responsible for paying the interest, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total inc....
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....e Assessing Officer has not recorded any statements from the payees of the interest to the effect that they did not file any declarations with the assessee at the appropriate time or to the effect that they filed the declarations only at the request of the assessee in September /October, 2008. In the absence of any such direct evidence, we are unable to reject the assessee's claim. The Assessing Officer has stated in para 4.4 of the assessment order that he found that some of the loan creditors were having taxable income but still the assessee had submitted declarations from them in form no. 15G. Unless it is proved that these forms were not in fact submitted by the loan creditors, the assessee cannot be blamed because at the time of paying the interest to the loan creditors, he has to perforce rely upon the declarations filed by the loan creditors and he was not expected to embark upon an enquiry as to whether the loan creditors really and in truth have no taxable income on which tax is payable. That would be putting an impossible burden on the assessee. That apart sub-section lA of Section 197A merely requires a declaration to be filed by the payee of the interest and once it....