TMI Blog2015 (11) TMI 1887X X X X Extracts X X X X X X X X Extracts X X X X ..... As both the creditors have confirmed the transaction and also filed details of their assessment particulars and these credits are given out of their bank account but the AO did not carry out any exercise whatsoever to verify these unsecured loans as is clearly evidenced from the assessment order. Even CIT(A) s finding is that AO has not conducted any further enquiry despite the fact that assessee has discharged its onus by filling the details. Once this is the position, we have no hesitation in confirming the order of CIT(A) and this issue of revenue s appeal is dismissed. Addition on account of purchase of spare parts - HELD THAT:- From the order of CIT(A), we find that complete details were available before him and on the basis of the same he has allowed the claim of the assessee. Even the sales arising out of the same purchases have not been doubted by the AO. Here in the present case only exception is M/s. Vishal Enterprises wherein it has not verified the veracity of the transaction. Hence, qua this only, we set aside the matter to the file of the AO so that assessee can prove the veracity of the transaction and for the balance purchases, we confirm the order of CIT(A) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the assessment records of the assessee. 3. Briefly stated facts are that the AO during the course of assessment proceedings made addition on account of sundry creditors from whom the assessee purchased goods. The assessee has purchased heavy earth moving machineries from the following parties: Sl. No. Name Address provided by the assessee Opening Balance Addition Subtraction Closing Balance 1. D. S. Enterprises 2, Canning St., Kol- 700001 0 29.08.900 0 29.08.900 2. Durga Trading Corporation 309, B. B. Ganguly St., 1st floor, Kol-700012 0 14,56,000 0 14,56,000 3. Gem Traders P-41, Princep St., Kol- 700072 0 32,68,754 0 32,68,754 4. Kalimata Trading Complex Salap, Kalitala, H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to doubt the purchases and sales and without going into these facts, the AO applied the provisions of section 68 of the Act in the absence of creditworthiness of these parties and made addition. We find no reason to sustain the same, as the very basis is not doubted by the AO, and assessee has discharged its onus by filing all the details before the AO. Accordingly, we confirm the order of CIT(A) and this issue of revenue s appeal is dismissed. 5. The next issue in this appeal of revenue is against the order of CIT(A) deleting the addition of unsecured loans of Rs.7.5 lacs. For this, revenue has raised following ground no. 2: 2. That the Ld. CIT(A) has erred in deleting the addition under the head unsecured loan creditor of Rs.7,50,000/- ignoring the material facts and circumstantial evidence brought on the assessment records of the assessee. 6. We have heard rival submissions and gone through facts and circumstances of the case. Briefly stated facts are that the assessee has taken unsecured loans from the following persons: Sl.No. Name Opening Balance Addition Interest T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vishal Enterprises 36,62,361 No evidence of creditworthiness /Third party evidence is filed. Not even confirmation is filed by the party although it was mentioned in the letter that the confirmation is enclosed. 2. Nandi Ispat Corporation 36,64,024 No evidence of creditworthiness /third party evidence is filed. 3. Goodwill Agencies 13,15,322 No evidence of creditworthiness / Third party evidence is filed. The AO required the assessee to explain the purchase made with evidence. According to AO, no evidence has been filed recording the veracity of the transactions and accordingly, he added the same. The CIT(A) deleted the addition by observing as under: Perusal of the assessment order reveals that the A.O. has discounted evidence that these parties are assessed to sales tax and the payments to them, during the year have been made by account payee cheques. In his view, these are circumstantial evidence. But, in that event, it appears that the appellant has indeed provided such evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been provided. Under the circumstances, in my opinion, the appellant has discharged its primary onus. If the A.O. doubted the creditworthiness of the parties, he should have made his own enquiries regarding them. Without doing so, in my view, he cannot doubt their creditworthiness and disallow the appellant's claim of purchases. The disallowances are directed to be deleted. This ground of appeal is allowed. Aggrieved, now revenue is in second appeal before Tribunal. 10. We find from the above facts and circumstances of the case that the assessee has filed confirmation from the parties from whom purchases were made and also details of transaction as are available on record and even now before us i.e. purchase bills, payment by cheque and these party s I. T details. Despite the fact that these details are available before the AO, the AO has not carried out any further enquiry on the basis of these evidence and straightway made addition on unverifiable purchases. From the order of CIT(A), we find that complete details were available before him and on the basis of the same he has allowed the claim of the assessee. Even the sales arising out of the same purchases have not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not doubted but he has made ad hoc disallowance for the reason that these payments are made to the persons specified u/s. 40A(2)(b) of the Act for invocation of provision of section 40A(2)(b) of the Act. First of all, there should be a finding recorded by the AO that the expenses are unreasonable and how? But from the order of the AO, it is not coming out that what is the basis for disallowance. Just simply ad hoc disallowance cannot be made. Accordingly, we confirm the order of CIT(A) deleting the addition. This issue of revenue s appeal is dismissed. 14. The next issue in this appeal of revenue is against the order of CIT(A) deleting the disallowance on account of truck hire charges for non-deduction of TDS u/s. 194C of the Act by invoking the provisions of section 40(a)(ia) of the Act. For this, revenue has raised following ground no.5: 5. That the Ld. CIT(A) has erred in deleting the addition under section 40(a)(ia) of Rs.31,96,956/- ignoring the material facts and circumstantial evidence brought on the assessment records of the assessee. 15. We have heard rival submissions and gone through facts and circumstances of the case. Briefly stated facts are that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is that at the time of paying the interest to the 34 persons mentioned in the assessment order, he had before him the appropriate declarations in the prescribed form from the payees stating that no tax was payable by them in respect of their total income and therefore tax need not be deducted from interest under section 194A, and in the light of these declarations he had no option but to make the payment of interest without any tax deduction. If the claim is true then the contention must be accepted because under sub-section (lA) of section 197A, if such a declaration is filed by the payee of interest, no deduction of tax shall be made by the assessee. The revenue authorities have doubted the assessee's version because according to them it is only when the Assessing Officer proposed the disallowance of the interest by invoking the section 40(a)(ia) in the course of the assessment proceedings that the assessee filed the declarations claimed to have been submitted to him by the payees of the interest, in the office of the CIT(TDS) as required by sub-section 2 of section 197A. Apart from this inference, there is no other evidence in their possession to hold that the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the payer shall not deduct any tax. The sub-section does not impose any obligation on the payer to find out the truth of the declarations filed by the payee. Even if the assessee has delayed the filing of the declarations with the office of the CIT / CCIT (TDS) within the time limit specified in sub-section (2) of section 197A, that is a distinct omission or default for which a penalty is prescribed. Section 273B provides that no penalty shall be imposed under any of the clauses of sub-section (2) of section 272A for the delay, if the assessee proves that there was reasonable cause for the same. We have already seen that under sub-section (4) of section 272A, no penalty can be imposed unless the assessee is given an opportunity of being heard. All these provisions indicate that the failure on the part of the assessee, who is the payer of the interest, to file the declarations given to him by the payees of the interest, within the time limit specified in sub-section (2) to section 197A is distinct and separate and merely because there is a failure on the part of the assessee to submit the declarations to the income-tax department within the time limit, it cannot be said that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
