Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (11) TMI 858 - ITAT JAIPURAddition on account of interest payment - assessee has given loans/advances of ₹ 1,00,96,320/- free of interest whereas the assessee has incurred interest expenditure of ₹ 8,75,543/-. - Held that:- it is the assessee’s decision to advance moneys on the basis of commercial expediency with or without interest and the fact that the A.O could not prove any adverse nexus between the two parties and the assessee firm., it is opined that the disallowances of interest on proportionate basis to the extent of ₹ 8,75,543/- by the assessing officer was not warranted. The same is accordingly directed to be deleted. - Decided against revenue Addition u/s 68 for unexplained credit on account of unsecured loans - Held that:- We note that all the six creditors have produced the confirmations, returns of income as well as their relevant record from the books of account to show that the transactions of loans given to the assessee were duly recorded in the books of account and through banking channel. AO conducted the enquiry and in response the relevant supporting evidences were filed by these creditors. Thus it is clear that despite receiving the supporting evidence directly from the creditors, the AO has made the addition by citing the reason that the assessee did not produce supporting evidence CIT (A) has examined the evidences available on the assessment record and found that the AO was having all the relevant details and supporting evidence during the assessment proceedings as called for under section 133(6) of the Act. On examination of these details and evidence as submitted by the six creditors, we find that the claim of the assessee was duly supported by the evidence produced by the creditors who having confirmed the transactions and also produced the evidence regarding their creditworthiness as all these creditors filed their returns of income, their ledger account and bank statements showing the transactions of loans given to the assessee.- Decided against revenue Addition by applying the GP rate of earlier year - Held that:- AO has to estimate the income of the assessee by taking a reasonable and proper basis and average of the past GP declared by the assessee can be a good guidance. Since this is the second year of the business, therefore, only two years are available for considering the average of the GP. Hence in the facts and circumstances of the case, when the variation in the GP is insignificant and there is an increase in the turnover of the assessee of more than three times from ₹ 9,60,00,000/- to ₹ 28,69,00,000/- then there is no justification of making addition by applying the GP rate of earlier year. Accordingly, in the facts and circumstances of the case, we delete the addition made by the AO on this account. - Decided in favour of assessee
|