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2012 (9) TMI 1093 - AT - Income TaxAddition on account of unaccounted advances - CIT-A allowed the appeal of the assessee by granting benefit of peak credit. From the facts and circumstances of the case, we do not have any reasons to confront the view of the learned CIT(A). Therefore, we are inclined to follow the decision of the learned CIT(A). Addition on account of bad debts u/s 36(1) (vii) - Held that:- This issue is covered by the decision of the Hon’ble Apex Court in the case of T. R. F. Ltd. Vs CIT [2010 (2) TMI 211 - SUPREME COURT ] wherein it was held that “it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough, if the bad debt written off as irrecoverable in the account of the assessee.” Accordingly, we delete the addition Addition on account of payment made to persons specified u/s 40A (2) (b) deleted as relying on assessee's own case [2011 (5) TMI 1049 - ITAT AHMEDABAD] Unexplained advances/loans - Held that:- Though the entries in the records seized from third party and his confirmatory statement may raise suspicion but cannot prove that it is assessee’s income”, which seems to be squarely applicable to the facts of this case. Further, the question raised by the learned AR remains to be unanswered that there was no interpretation made by the learned AO for the balance amount of ₹ 2,15,60,000/- advanced out of the total amount of ₹ 2,78,60,000/- decoded as amount advanced, whereas the learned AO treated ₹ 63,00,000/- pertaining to the assessee. Additions deleted Addition on account of interest income on unaccounted loans - Held that:- CIT(A) deleted the addition as he held that there was no reason for making the addition of ₹ 63,00,000/- in the hands of the assessee for the alleged advances made through Shri Mihir Shah. Since, we have also concurred with this view of the learned CIT(A) (supra) and this addition of ₹ 1,34,940/- being consequential for the addition made for ₹ 63,00,000/-, we delete the same. Addition on account of unaccounted payments/advances - Held that:- This issue pertains to the granting of benefit of peak credit to the assessee for the advances made and advances returned. Both the parties submitted that the this issue is the same as considered for the AY 2006-07 wherein the learned AO did not grant the benefit of peak credit considering that there was no rotation of money involved, however, the learned CIT(A) had allowed the appeal in favour of the assessee. Thus we follow the same and allow the appeal in favour of assessee Addition on account of silver coins purchased - Held that:- There is no dispute with respect to the year in which the silver coins were procured i.e. during the year 1995. If these coins were purchased for the purpose of distribution as gift by the assessee and distributed as such during that year, the assessee may have been entitled to claim it as expenditure for that year. If a portion of the same is not distributed, then the same ought to have appeared as asset in the balance sheet of the assessee. Thus, whatever may be the position then, the effect in the profit & loss account might have been correctly or incorrectly presented in that year which does not have any bearing on the year under consideration. Further, there is no dispute that the silver coins were purchased during the year 1995 from the declared source of income. Addition on account of excess physical stock over the stock book - Held that:- CIT(A) has considered the issue judiciously. The learned CIT(A) has adjusted the shortage of stock with the excess stock i.e. value of shortage of stock of ₹ 20,03,436/- (–) value of excess stock of ₹ 7,10,626/- which amounts to ₹ 12,92,810/- and calculated 6% on the same to be income accrued for the discrepancy in stock which works out to ₹ 77,568/-. However, the learned CIT(A) estimated the addition to ₹ 1,00,000/- as against the addition of ₹ 8,30,826/- made by the learned AO. Thus, the learned CIT(A) deleted the addition of ₹ 7,30,826/-. We concur with this view of the learned CIT(A)
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