TaxTMI 
TaxTMI 
2024 (12) TMI 984
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....y Ld. Assessing Officer [AO] u/s 143(3) of the Act on 31-12-2019. The grounds of appeal read as under: - The order of the Commissioner of Income Tax(Appeals) NFAC, in so far as it is against the assessee, is contrary to law, erroneous and unsustainable on the facts of the case. I. ADDITION u/s. 69 OF THE ACT : 1.The CIT(A) NFAC erred in confirming the addition of Rs. 1,29,99,000/- as unexplained money under sec.68 of the Act. 2.The CIT(A) NFAC failed to appreciate that the cash deposited in the bank accounts were the amounts realized from sundry debtors, namely, Nagore Timber Traders, Sri Vijayalakshmi Timber & Tiles, Mubarak Traders, Kumaravilas Timber Mart, Sree Balaji Timbers and Sri Maruti Timbers and....
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....e that the assessee had placed on record the rejection of the insurance claim by the insurance co. of the huge loss of stock suffered by assessee in the Dec.2015 floods and hence the write off by assessee was fully justified. 9.The CIT(A) NFAC further failed to appreciate that in the A.Y.201617, this amount was shown as 'Insurance receivable' in the P & L a/c and since the insurance company rejected the claim, the assessee had to write-off the loss as not recoverable in the current year and hence confirming the disallowance was improper and unjustified. III ESTIMATED ADDITION OF SUNDRY CREDITORS : 10.The CIT(A) NFAC erred in confirming the estimated addition of the sundry creditors to the extent of the gro....
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....aced on record. The Ld. Sr. DR also advanced arguments and referred to the findings of lower authorities. Having heard rival submissions and upon perusal of case records, the impugned issues are adjudicated as under. The assessee being a partnership firm is stated to be trading in timber. 3. Addition of cash deposits 3.1 To verify the source of cash deposited by the assessee during demonization period, the case was subjected to scrutiny. It transpired that the assessee deposited cash of Rs. 579.81 Lacs during entire financial year out of which sum of Rs. 129.99 Lacs was deposited during demonetization period. 3.2 The assessee submitted that cash was received from various parties which were duly recorded in the books of accounts. Th....
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....one-off event. The nature of business was such that the considerable sales were in cash. The Ld. AO erred in creating a nexus between re-payment of trade debt by the income returned by the debtors. The assessee duly recorded the transactions in its books of accounts regularly maintained in the regular course of business. The assessment order does not bring out any such fact that the impugned deposits were unexplained money. However, Ld. CIT(A) rejected the same and confirmed the addition. Aggrieved, the assessee is in further appeal before us. 3.5 From the facts, it emerges that the assessee is a partnership firm and it is carrying out trading of timber. The substantial sales are in cash which is evident from the fact that the assessee h....
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....ecovery of insurance claim for Rs. 58.78 Lacs. The Ld. AO alleged that the same was afterthought to reduce the business income and accordingly, added the same to the income of the assessee. 4.2 During appellate proceedings, the assessee explained that during floods of December, 2015, the trading stock was washed away and the assessee suffered huge losses. The assessee made a claim with the insurance agency for the year ending 31-03-2016. The amount so recoverable was offered to tax by way of credit to Profit & Loss Account in that year. In this year, the insurance company rejected the claim and accordingly, the claim was written-off / reversed in this year. The same would be allowed since the same was already offered to tax in earlier ye....
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.... the assessee. There could be no arbitrary addition on percentage basis. However, Ld. CIT(A) rejected the same and directed Ld. AO to restrict the addition by applying the Gross Profit Rate of this year to the creditors. Aggrieved, the assessee is in further appeal before us. 5.3 It clearly emerges that the adhoc addition as made by Ld. AO and as confirmed by Ld. CIT(A) is without any basis. No case of invocation of Sec. 41(1) has been made-out against the assessee. Nothing has been shown that the trade creditors have ceased to exist. The ledger extracts of sundry creditors have been placed on record. The perusal of the same would show that the assessee has made purchases from them and have regular dealing with all of them. The payments ....