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2014 (4) TMI 664 - AT - Income TaxAddition u/s 68 of the Act – Unexplained cash credit – Held that:- CIT(A) rightly held that the assessee has shown an amount of Rs. 37,06,000/- in cash - there was cash payment of Rs. 15,57,000 - CIT(A) was convinced that the assessee has failed to discharge the onus cast upon it by virtue of Sec. 68 and confirmed the addition of Rs. 21,49,000/- in the name of Shri Raouff Ansari - the assessee has never discharged the initial onus cast upon it by Section 68 of the Act – CIT(A) has confirmed the addition of Rs. 2640 for want of verifiable details – thus, there was no reason to interfere with the findings of the CIT(A) - Decided against Assessee. Disallowance of prior paid expenses – Held that:- The assessee could not prove before the CIT(A) that the liability have crystallized during the year under consideration – thus, there was no reason to interfere with the findings of the CIT(A) – Decided against Assessee. Disallowance of 5% of expenses on adhoc basis – Held that:- Considering the nature of expenses and the non co-operation by the assessee in not filing the details – as the CIT(A) has already reduced the disallowances by 50% - thus, there is no no need for any interference in the order of the CIT(A) – Decided against Assessee. Deletion of addition u/s 68 of the Act - Unexplained cash credit – Held that:- CIT(A) rightly held that the confirmations were furnished by the party and also furnished its PAN to AO - the loan was returned in subsequent year and the sum of Rs. 2,93,138/- represents provision for interest on the opening balance plus the money introduced during the year - the assessee has successfully discharged the initial onus cast upon it by virtue of Sec. 68 of the Act – this, there is no need for interference in the order of the CIT(A) – Decided against Revenue. Addition u/s 68 of the Act – Onus to prove - Amount received from MD of the company as cash credit – Held that:- CIT(A) has rightly held that the assessee has shown the amount from Directors under the head ‘unsecured loans’ from the Directors – the provisions of Sec. 68 clearly apply on the facts of the case - the primary onus is on the assessee and this onus stands undischarged - the addition for the reasons that the assessee has not discharged the primary onus cast on it u/s 68 of the Act – thus, there is no reason to interfere with the findings of the CIT(A) – Decided against Assessee. Disallowance of prior paid expenses – Held that:- CIT(A) was convinced that the liability for octroi charges did crystallized during the year and allowed the relief to the extent of Rs. 1,57,189 - In so far as advertisement expenditure is concerned, CIT(A) observed that the liability was crystallized in the earlier year therefore cannot be allowed as expenditure during the year under consideration – the CIT(A) has given a clear finding regarding the crystallization of liability in respect of advertisement expenditure – thus, there is no need for interference in the order of the CIT(A) – Decided against Assessee. Deletion made u/s 41(1) of the Act – Held that:- The AO has made the addition u/s 41(1) of the Act only because he found that the liabilities were outstanding for more than one year - CIT(A) has rightly observed that this cannot be any ground for making the addition u/s 41(1) of the Act – thus, there is no reason for any interference in the order of the CIT(A) – Decided against Revenue. Disallowance of professional /legal charges – Held that:- CIT(A) rightly held that the assessee and its associated concerns are different entities carrying on business separately - CIT(A) was convinced that the expenses are not incidental to the business of the assessee – as the assessee has failed to substantiate its claim of expenses, there is no reason for any interference in the order of the CIT(A) – Decided against Assessee. Penalty u/s 271(1)(c) of the Act – Unexplained cash credit u/s 68 of the Act – Held that:- As decided in assessee’s own case for the previous assessment year, the assessee has grossly failed to explain the genuineness of the transaction – thus, the levy of penalty is justified and since a minimum penalty has been levied at the rate of 100% of the tax sought to be evaded, no interference is called for – Decided against Assessee.
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