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2015 (11) TMI 790 - AT - Income TaxUnexplained cash deposits - CIT(A) deleted the addition - Held that:- CIT(A) goes to prove that the deletion has been made merely at the instance of appellant without calling upon any cash book maintained by the assessee to prove the total expenditure made by the company in cash rather relied upon a letter dated 11.11.2008 filed by the appellant that cash book was produced before the A.O. For arguments sake, even if it is assumed that the assessee has produced cash book before the A.O., there was no hitch with Ld. CIT(A) to entertain the same again in additional evidence by calling upon the remand report from the A.O. after due verification. Since A.O. has specifically recorded the findings that cash book was not produced nor such cash book has been perused or entertained by Ld. CIT(A) in additional evidence, it is improbable on the part of Ld. CIT(A) as to how he believed the assessee's letter. So, the findings of Ld. CIT(A) deleting the addition of ₹ 7,44,000/- made by the A.O. on account of unexplained cash deposits are perverse and illegal, hence, set aside and the case is required to be restored to the file of Ld. CIT(A) for deciding the same afresh - Decided in favour of revenue for statistical purposes. Addition on account of difference in credit balance in OD account - CIT(A) deleted the addition - Held that:- CIT(A) deleted the addition on the basis of explanation furnished by the assessee which is to the effect that "cash credit account with the bank and the balance in the books has been duly reflected under the head 'secured loan', which fact is proved from the bank reconciliation account statement placed by the appellant as Annexure IV" in the submissions filed during the appellate proceedings, which were also filed before the A.O. vide their letter dated 11.11.2008. From the explanation furnished by the assessee, it is also proved that the amount of ₹ 1,05,544/- represents cheques issued but not accounted for by the bank. But the A.O. inadvertently adopted the figure as 'nil' as balance with the bank as on 31.03.2006 as against the correct figure of ₹ 11,16,341/- which stands duly reflected in the balance sheet and is stated to be open to verification. The A.O. has made addition by merely holding the explanation of the assessee as not found satisfactory' without giving any reason. So, when the assessee has duly explained the amount as secured loan and got reconciled as per bank reconciliation account placed by the appellant as Annexure IV the Ld. CIT(A) has rightly deleted the addition - Decided in favour of assessee. Addition on account of unverified sundry creditors - CIT(A) deleted the addition - Held that:- CIT(A) has proceeded to delete the addition merely on the ground that, "in the remand report, A.O. has not stated that 'these confirmations suffer from any defect or inconsistency or show that any false claim was made by the appellant.' Ld. CIT(A) has also stated in the impugned order that during the course of assessment as well as during the appellate proceedings, the assessee has submitted complete list and the addresses of sundry creditors advances received and other liabilities with regard to Concord Asia and OGT International but strangely enough when the A.O. has categorically mentioned in the remand report that details of sundry creditors, details as to advances from customers and details as to other liabilities were not available in the assessment record, it was humanely not possible for the A.O. to reach at the logical conclusion to verify the antecedents, genuineness and creditworthiness of sundry creditors, advances from the customers and to verify other liabilities. Even no such document have been taken on record by the Ld. CIT(A) in additional evidence as per law rather proceeded on the basis of conjectures and surmises that the A.O. has not given any adverse report during remand proceedings regarding the claim of the assessee. Hence, we are of the opinion that findings of Ld. CIT(A) in deleting the addition made by the A.O. are perverse and hence, set aside. The case is required to be restored to the file of Ld. CIT(A) for deciding the same afresh - Decided in favour of revenue for statistical purposes. Addition on account of unvouched imports from Concord Asia Co - CIT(A) deleted the addition - Held that:- As during the assessment proceedings, the appellant could not furnish original bills for verification as per the assessment order. Therefore, it appears that photocopies of the same were filed. The A.O. was required to examine the issue during remand proceedings are directed by Ld. CIT(A) and stated to have not pointed out anything adverse but when invoice in question for Rs.US$9396 (Rs.417685) has not seen the light of the day nor the same has been annexed with the paper book, nor the same has been entertained in additional evidence, Ld. CIT(A) has erred in proceeding with the matter in deleting the addition merely on the ground that during remand proceedings 'nothing adverse has been pointed out by the A.O.'. So, in view of the fact that in the absence of invoice in question, which has not been taken on record even in additional evidence during appellate proceedings, Ld. CIT(A) has erred in deleting the addition The case is required to be restored to the file of Ld. CIT(A) for deciding the same afresh - Decided in favour of revenue for statistical purposes. Addition on account of unvouched expenses - CIT(A) deleted the addition - Held that:- In the absence of any document on record, findings of Ld. CIT(A) in deleting the addition of ₹ 4,23,098/- are perverse and hence the same are hereby set aside. At the same time, the disallowance @ 100% of expenses made by the A.O. is not justified particularly when the expenses were incurred for business purposes. Therefore, to meet the ends of justice, disallowance @ 10% of the expenses i.e. ₹ 42,310/- will be fair and reasonable to cover the leakage, if any, on account of personal element. - Decided partly in favour of assessee.
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