TaxTMI 
TaxTMI 
2024 (5) TMI 485
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....e are challenging the confirmation of disallowance of various expenses debited in the P&L account, either in full or on ad hoc basis by the learned CIT(A). 4. We have heard rival submissions and perused the materials available on record. The assessee is an individual engaged in the business of trading in sugar in the name of M/s Shree Balaji Sugar Co. During the year under consideration, the assessee has debited expenses to Rs 1,22,50,949/- and earned a net profit of Rs. 8,11,963/. and gross profit of Rs 66 ,76,736/-. During the course of reassessment proceedings, the assessee was asked to provide justification for the expenses incurred and debited to Profit & Loss A/c. Thereafter, the assessee filed detailed replies and also submitted the following documents in order to justify the expenses incurred by him:- i. Month wise details of expenses incurred ii. Details of salary paid iii. Details of unsecured loans iv. Copy of confirmations of parties from whom unsecured loans were obtained and interest on such loans was provided v. A copy of ITRs of such lenders of unsecured loans 4.1 However, ignoring the replies and documents furnishe....
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....se disallowance of each expense as confirmed by the Ld. CIT(A) are as follows:- 1. Printing & Stationery Expenses - Rs. 82,425/- ii. Postage & Telegram Expenses - Rs. 46,367/- iii. Salary Expenses- Rs. 16,86,880/- iv. Interest on unsecured loans - Rs.9,91,853/- v. Staff Welfare Expenses - Rs. 1,46,225/- vi. Computer Repair & Maintenance Expenses- Rs.30,800/- vii. Conveyance Expenses - Rs. 1,54,070/- viii. Diwali Expenses- Rs.62,600/- ix. General Expenses- Rs.95,431/- x. Office Expenses- Rs.1,12,610/- xi. Loading & Unloading Expenses- Rs. 12,86,464/- 4.4 Aggrieved by the order of CIT(A), the assessee has filed an appeal before the Tribunal. It is pertinent to note here that the assessee has maintained complete books of accounts which were duly audited by a Chartered Accountant and were submitted to the Ld. AO during the course of re-assessment proceedings. Further, no specific irregularity or error has been pointed out by the Ld. AO in the books of accounts submitted by the assessee. Also, the assessee has submitted detailed documents and explanations to justify the expenses incurre....
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....his business. Absent such findings, interest paid on unsecured loans which were considered as genuine, cannot be subjected to any disallowance. Hence, we direct the Ld. AO to grant deduction for interest in the sum of Rs. 9,91,853/-. Accordingly, ground no. 9 raised by the assessee is allowed. 5. Ground nos. 12 & 13 raised by the assessee are general in nature and do not require any specific adjudication. 6. Ground no. 11 raised by the assessee is challenging the confirmation of disallowance of Rs. 73,44,755/- on account of difference in purchases debited by the assessee vis a vis corresponding value shown by the suppliers in their response to notice issued u/s 133(6) of the Act. 6.1. We have heard rival submissions and perused the materials available on record. During the course of reassessment proceedings, in order to verify the genuineness of the purchases made by the assessee, the Ld. AO called for information from various parties under section 133(6) of the Act. Out of various parties from whom the purchases have been made by the assessee, the Ld. AO disallowed purchases to the extent of Rs. 3,25,95,920/- made from two parties namely Thiru Arooran Sugar Ltd and Dwarik....
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....ove parties as additional evidences and explained that the difference in the purchases recorded by the different parties was due to various reasons such as taxes, freight charges etc. The assessee further submitted the following reconciliation from M/s Thiru Arooran Sugar Ltd, which is as under: Particulars Amount (Rs.) Purchases as per books of accounts of the assessee 12,34,96,604/- Add: Freight Charges paid by the assessee to M/s Thiru Arooran Sugar Ltd. vide Debit Note No. 198 dated 18.12.2009 issued by M/s Thiru Arooran Sugar Ltd. against invoice No. TASLTMK/ 198/2009 which should have been recorded in Purchase A/c by the assessee in his books, however mistakenly recorded in Loading and Unloading Expenses A/c 1,74,438.65/- Less: Purchase made by the assessee vide invoice no. TASLACR/ 165/2009 dated 31.10.2009 from M/s Thiru Arooran Sugar Ltd. which was recorded by M/s Thiru Arooran Sugar Ltd. in the name of M/s Subham Sugar Agency Ltd., Kolkata instead of assessee 2,52,51,165. 45/- Less: Freight Charges paid by the assessee to M/s Thiru Arooran Sugar Ltd. vide Debit Note No. 165 dated 31.10.2009 issued by M/s Thiru Arooran Sugar Ltd. against above me....