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2014 (11) TMI 470 - AT - Income TaxUnexplained cash credits u/s 68 – Onus to prove discharged by assessee - Held that:- The AO made addition being difference of closing and opening balance under the head Unsecured Loans - CIT(A) rightly made a finding that there was no evidence or material that the money directly or indirectly emanated from the assessee so that it could be said that the assessee’s own money was brought in the guise of loans and the assessee has successfully established the three requirements of section 68 which are Identity of creditors, Capacity of creditors to advance money and genuineness of the transaction - when all the three conditions are proved by the assessee, then the burden shifts to the revenue to prove that amount belonged to the assessee - the assessee was able to prove the identity of the creditors and was able to show their creditworthiness and could demonstrate the genuineness of the transaction by sufficient evidence – thus, the order fo the CIT(A) is upheld – Decided against revenue. Depreciation on new fixed assets – Evidences filed by assessee - Held that:- CIT(A) had rightly observed that the AO has not found any discrepancy in the supporting evidence furnished by it regarding the acquisition and installation of the new fixed assets during the relevant year - he has verified the evidence regarding the new fixed assets acquired during the AY and the claim of the assessee in respect to the depreciation is valid in law – the order of the CIT(A) to allow the depreciation for the new fixed asset as per the claim of the assessee is upheld – Decided against revenue. Administrative and manufacturing expenses – Held that:- CIT(A) has recorded a finding that there was no material available with the AO on the basis of which he could have estimated the disallowance to the extent of 10% of expenses - there was no material or evidence before the AO, to support the disallowance at an ad-hoc rate of 10% of the total expense - CIT(A) has pointed out that the disallowance of the ad-hoc disallowance, smacks of arbitrariness and is devoid of any logic – thus, the order of the CIT(A) is upheld – Decided against revenue. Amount surrendered during the survey operation u/s 133A – Held that:- CIT(A) have pointed out that the AO has in all fairness has admitted in the remand report that the addition stands explained as the amount has been already included by the assessee in the profit and loss account under the head ‘Other Incomes’ and the return of income was filed accordingly - thus, the order of the CIT(A) is upheld – Decided against revenue.
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