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2015 (9) TMI 1668 - AT - Income TaxAddition of interest expenses and storage charges - HELD THAT:- AO has bifurcated these expenditure to AY 2005-06 and AY 2006-07. So the issue is when can it be said that the liabilities have crystallised. It is not in dispute that the final lifting of the paddy was completed during the relevant AY and the account also got settled then after several correspondences between the assessee and PSWC whereby some waivers were granted to the assessee. A certificate of receipt towards interest and towards storage charges during FY 2005-06 issued by PWSC has been placed at PB 4.1. The authenticity of this certificate has not been challenged. No doubt as evident from the working of the interest and storage charges, the incurring of the liabilities have been determined with reasonable certainty, but it cannot be said that the actuals have been quantified correctly as extension of interest as well as storage waivers have been given by the PSWC. In other words, it can be safely said that the liability got crystallised during AY 2006-07 when the dues have been squared up. Thus, as find the contention of the assessee as put forth deserves to be accepted. Addition of interest expenses - HELD THAT:- We do not find any merit in this ground of appeal of the revenue. The assessee was to recover the amount from sister concern on account of sales made to this party which has no connection whatsoever with the interest and storage paid to PSWC for lifting of the paddy. Since for lifting of the paddy, assessee used storage facility of PSWC, therefore, amount was spent for the purpose of business only. Further, assessee has not claimed any interest expenditure in assessment year under appeal. Therefore, addition made by the Assessing Officer was wholly unjustified. CIT(Appeals), on proper appreciation of the facts and material on record correctly deleted the addition and this ground of appeal of the revenue is accordingly, dismissed. Addition on account of valuation of closing stock - HELD THAT:- It is clear that assessee has been able to prove reduction in the valuation of the closing stock because these commodities get deteriorated and explanation of the assessee is supported by material on record, therefore, authorities below were not justified in making and confirming the addition on account of undervaluation of closing stock. We, therefore, set aside the orders of the authorities below and delete the addition Addition u/s 68 as unexplained credit - HELD THAT:- Assessee has been able to prove creditworthiness of the creditor and all these evidences on record also prove that assessee entered into genuine loan transaction with the creditor. Therefore, the initial burden lay upon the assessee to prove identity/existence of the creditor, its creditworthiness and genuineness of the transaction have been discharged by the assessee. AO has, however, not brought any evidence on record to prove that loan was not genuine in the matter. Therefore, there was no justification for the authorities below to make addition against the assessee under section 68
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