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2016 (5) TMI 463 - ITAT AHMEDABADAddition on account of unsecured loan - unexplained creditworthiness - Held that:- Due to lack of copy of bank statement and copy of identity it is difficult to accept the contention of assessee about the identity, creditworthiness and genuineness of the unsecured loan taken from Hemal Nanavati. It is pertinent to note that in many cases where the amount of unsecured loan is taken by account payee cheque but when the bank statement of the loan creditor is perused it is observed that the loan creditor normally maintains a minimum balance and just before few days of giving a loan by account payee cheque, cash is deposited in the bank account and unless it is proved that loan creditor has sufficient source of cash to deposit in the account, creditworthiness of the loan creditor is not proved and in the ground before us there is no documentary evidence except that the loan creditor is having opening balance in the books of account and during the year amount has been received by account payee cheques but no copy of bank statement is available through which we could have verified the factual status of the creditworthiness of the loan creditor. Also if the assessee has been able to show that for Asst. Year 2006-07 assessee had passed through scrutiny assessment u/s 143(3) of the Act and loan creditor Hemal Nanavati has been verified and held as genuine by Revenue for loan taken in Asst. Year 2006-07 then it could have formed the basis for us to accept the creditworthiness of Hemal Nanavati for the year under appeal. However, no such information is placed on record. Therefore, we are of the view that Assessing Officer has rightly made addition u/s 68 - Decided against assessee Addition on account of commission expenses - Held that:- No disallowance was called for in relation to commission expenses as assessee has been able to demonstrate complete details including calculation of commission debited during the year in profit and loss account - Decided against revenue Addition invoking provisions of Section 36(1)(iii) on account of interest expenses - Held that:- We have gone through the ledger account of Aabhar Holding Pvt. Ltd. and we observe that in the ledger account appearing in the sundry creditor list, assessee has entered into various transactions of sale of cloth and similarly various transactions of bleached cloth purchases are appearing which is enough to show that there has been regular business dealing with Aabhar Holding Pvt. Ltd. The net difference between the debit and credit balance of Aabhar Holding Pvt. Ltd. as on 31.3.2007 works out to the debit balance of ₹ 25,80,080/- (Rs.2,14,00,018/- (-) ₹ 1,88,20,938/-). In the given circumstances assessee has been able to prove that transactions have been entered in the course of business commercial expediency with regard to purchases and sales then it was not correct on the part of Assessing Officer to make disallowance of interest of ₹ 18,90,321/- only with reference to non-charging of interest in debit balance of ₹ 2,14,00,018/- in the name of Aabhar Holding Pvt. Ltd. Therefore, we are of the view that ld. CIT(A) has rightly deleted the addition - Decided against revenue Addition on account of unproved creditors - Held that:- Had there been genuine sundry creditors then either they had been paid off in the following years or they certainly would have given duly signed confirmation letters which are completely missing in the case of assessee. We are therefore, of the view that to the extent of ₹ 5,57,293/- addition was rightly made by Assessing Officer. As far as difference of the remaining amount of addition of ₹ 73,253/- (Rs. 6,30,546/- (-) ₹ 5,57,293/-), we confirm the decision of ld. CIT(A) as these amounts must have been paid off in the following years. Accordingly we sustain the addition of ₹ 5,57,293/- out of ₹ 6,30,293/- in relation to sundry creditors which have not been proved by the assessee. - Decided partly in favour of assessee Disallowance of packing material and stores expenses - Held that:- . From perusal of record, we observe that all relevant material in the form of copies of purchase bills of packing material, stores consumed were placed before the assessing authority and no defect has been pointed out by the Assessing Officer. The evidences placed on record are sufficient to support the claim of assessee for claiming allowance of ₹ 7,12,662/- towards packing material and stores consumed and we are of the view that ld. Assessing Officer erred in making an ad hoc disallowance by taking a view on the basis of his own surmises and conjectures and completely ignoring the documentary evidences and audited financial statements. We are therefore, of the view that ld. CIT(A) has rightly deleted the disallowance - Decided against revenue Disallowance of tractor expenses - Held that:- The disallowance having been made on ad hoc basis without pin-pointedly detecting any defects in the books of account of the assessee and the expenses have been supported by bills and vouchers. Therefore, the disallowance is deleted. - Decided against revenue Disallowance of provisions for expenses like staffs salary & bonus, travelling exp., telephone exp., electricity charges, audit fees and stationary bills etc. - Held that:- From going through the list showing provisions of expenses we find that all the expenses are of recurring nature which remained unpaid at the end of the year which mostly pertaining to the last month or as the case may be. However, we do not agree with the view taken by the Assessing Officer who has not pointed out any specific defect in regard to the expenses claimed by the assessee for ₹ 2,96,177/- rather he has made disallowance only by taking the basis of payment made in the subsequent year. In our view if the expenses has been genuinely booked in the books of account then payment made or not is not material and the same is the factual position in this ground wherein no defect has been specifically pointed out by the Assessing Officer in the claim and he has just made the disallowance for the unpaid amount which in our view is not correct. Therefore, we are of the view that ld. CIT(A) has rightly deleted this addition - Decided against revenue
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