TaxTMI 
TaxTMI 
2023 (4) TMI 227
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....acts of the case. 2. On the facts and in the circumstances of the case, the ld. CIT(A) has erred in deleting the addition of Rs.6,04,70,000/- u/s 68 of the I.T. Act. 3. On the facts and in the circumstances of the case, the ld. CIT(A) has erred in deleting the addition of Rs.1,39,84,900/- holding that there is no legal basis for such an ad-hoc disallowance." 3. The AO made addition of Rs. 6.04 crores owing to non-submission of details of investors. Before the ld. CIT(A), the assessee filed details and the source of capital contribution from M/s. Affy Parenterals. 4. The relevant part of the submission of the assessee before the ld. CIT(A) is as under: "We are humbly submitted that we have duly and truly subm....
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....o mentioned in his show cause notice dated 18.12.2018 and also mentioned on page no. 02 of Assessment order. b) Certified copy of capital account of Mr. Arvind Billa (Partner) maintaining with M/s Affy Foodtech LLP and also reflecting the same in the Audited balance sheet of assessee firm M/s Affy Foodtech LLP. c) Bank statement of Assessee firm M/s Affy Foodtech LLP in which narration also revealed that amount received from Mr. Arvind Billa (Partner). iii) Creditworthiness of the Partner This is to bring your kind attention that Arvind Billa (Partner) is also the partner in M/s Affy Parenterals. M/s Affy Parenterals, also filed their income tax return and assessed within the same ward. The fund which was....
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....e tax are enclosed) c) Computation of Income for the AY 2016-17 of Mr. Arvind Billa, which also revealed the capital account of various partnership firm and also prove the capacity to introduced the capital in his partnership firm. d) Balance sheet in profit & loss account of Mr. Arvind Billa of his proprietorship firm for the FY 2015-16 relevant to the AY 2016-17. e) M/s Affy Parenterals is also filed their income tax return within time regularly with the respective jurisdictional authority. Copy of the ITR is also enclosed for your kind perusal and records. In this regards we humbly submitted that Mr. Arvind Billa is also Partner having 80% of profit sharing ratio in M/s Affy Parenterals. There is suffi....
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....y the Ld. AO and also not discussed on the relevant documents submitted before him except quoting of the judgements of honorable courts and ITAT." 5. On going through the details filed, the ld. CIT(A) held as under: "Genuineness and source of funds deployed as addition in capital in assessee firm by Mr. Arvind Billa as a partner in M/s Affy Foodtech LLP is supported, duly and truly proved by Bank statements, and copy of the Ledger account of M/s Affy Parenterals and M/s Affy Foodtech LLP which are duly submitted herewith. Moreover, each and every transaction have duly and truly been self revealed as narration mentioned in the personal HDFC bank statement that funds transferred by debited capital account of Mr. Arvind Billa from ....
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....ue on this ground is dismissed. Ad-hoc Disallowance of Rs.1.39 crores: 8. During the assessment proceedings, the assessee was asked to file the month wise and person wise details of salaries and why the provision of ESIC and PF was not applicable. In reply to the same, assessee had submitted that the provision of ESIC and PF are not applicable to them. The month wise and Person wise details of Salaries were not submitted. Considering the non-reply of the assessee that the provisions of ESIC are not applicable derived into a fact that the employee strength of the assessee firm is below 10 employees as per the AO. Since, the assessee firm had claimed Salary Expenses of Rs.1,86,46,534/- for which no details were filed, the AO disallowed ....