TMI Blog2019 (5) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... same is concerned, it is found that books of accounts were duly audited and the assessee was having closing cash balance. Therefore, there could be no justifiable reason to disallow the same. Similarly, the disallowance of depreciation was not justified since the business had not closed down and the block of asset continue to exist in the books. Therefore, by deleting both these additions, grounds of assessee allowed. Addition of Sundry Creditors - Disallowance made for want of proper explanation - cessation of liability - HELD THAT:- We find that new liabilities incurred during the year represent audit fees payable to auditors, outstanding staff salary professional tax. These are current liabilities and nothing on record suggest that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds of appeal. Since common issues are involved, the appeals are being disposed-off by way of this common order for the sake of convenience brevity. ITA No. 7032/Mum/2017, AY: 2009-10 2.1 The appeal contests the order of Ld. Commissioner of Income-Tax (Appeals)-47, Mumbai, [CIT(A)], Appeal No. CIT(A)-47/AP.12888/16-17 dated 25/09/2107 on following grounds of appeal: - 1. Learned Commissioner of Income Tax (Appeals) erred in confirming the assessment order passed u/s. 143(3) r.w.s 254 of Income Tax Act, 1961 determining total income at ₹ 18,41,901/-. 2. The Learned Commissioner of Income Tax (Appeals) erred in not discussing the Ground No. 1 containing grounds from I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of ₹ 1,83,493/- on account of disallowance of expenditure incurred. c. Delete the addiion made of ₹ 15,99,886/- on account of cession of outstanding liabilities. d. Demand of disputed demand may be stayed till the hearing and disposal of appeal on merit. e. Any other relief your honour may deem fit. 2.2 The assessment for impugned AY was framed u/s 143(3) on 14/12/2011 at ₹ 18.41 Lacs after certain additions which was contested up to the level of this Tribunal. However, the matter of addition was remitted back by Tribunal to the file of Ld. AO for fresh adjudication vide ITA Nos. 731-32/Mum/2013 order dated 09/09/2015. However, it is noted that the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in view of the fact that no business activity was being carried out by the assessee during impugned AY. 3.2 Upon perusal of page no.24 of the paper-book , we find that these expenditures are in the nature of audit fees, bank charges, salaries to two employees and rent paid by the assessee. These expenses, in our opinion, were necessary routine expenditure so as to maintain the corporate personality of the assessee. So far as the source of the same is concerned, it is found that books of accounts were duly audited and the assessee was having closing cash balance of ₹ 22,894/-. Therefore, there could be no justifiable reason to disallow the same. Similarly, the disallowance of depreciation was not justified since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tand of lower authorities, therefore, could not be sustained to that extent. The amount of ₹ 13,21,606/- represent amount due towards one of the directors of assessee company. The assessee had already filed confirmation of the concerned director. It is noted that the assessee has received further sum of ₹ 1.20 Lacs from the said director during the year which was added to the income of the assessee. However, the same has already been deleted by Ld. first appellate authority upon finding that the assessee fulfilled the onus of providing identity, genuineness and creditworthiness of the said director. Nothing on record suggest that the liability of the assessee company has ceased to exist and therefore, no addition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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