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2016 (3) TMI 636 - AT - Income TaxUnexplained unsecured loan - failure to prove the creditworthiness and genuineness of the person lending Unsecured loan u/s 68 - Held that:- We find that this issue was decided by CIT(A) in favour of the assessee on the basis that this amount of ₹ 16,28,868/- added by the Assessing Officer u/s 68 is regarding opening balance of three outgoing partners and therefore, the same is not justified. We find no infirmity in the order of CIT(A) on this issue because opening balance cannot be added in the present year u/s 68 and hence, we decline to interfere in the order of learned CIT(A) on this issue. - Decided against revenue Addition on unexplained sundry creditors - Held that:- in the present case, the assessee has not established this also that the creditors are for goods or expenses and mere crediting the amounts in the account with the nomenclature “Creditors for material and labour etc.” as per copy available on pages 47 to 64 of the paper book does not establish the contention that there are creditors for goods and/or expenses particularly in the absence of name and address of the said creditors. Hence, we reverse the order of CIT (A) on this issue and restore that of the A.O - Decided against assessee Disallowance of salary of partners - Held that:- Disallowance of salary to partners has been deleted by CIT(A) on the basis that during the year in question, fresh partnership deed was prepared in which salary to partners was settled to be paid on the basis of profit sharing ratio and this was done to give boost to the partners to work more diligently and honestly for the upliftment of the firm. He has further noted that the partners were also reduced from 8 to 5. Regarding this allegation that the partnership deed was not filed, it is noted by CIT(A) that the same was filed before the Assessing Officer and this finding of CIT(A) could not be controverted by Learned D. R. of the Revenue and therefore, on this issue, we do not find any infirmity in the order of CIT(A) and therefore, we uphold his order on this issue - Decided against revenue Addition u/s 40A(3) - Held that:- This disallowance was deleted by CIT(A) on the basis of submissions of the assessee before him stating that on each day, purchases were made in cash from different persons/parties on several occasions but the payment made to single party on single purchase did not exceed the limit of ₹ 20,000/-. No such instance has been noted by CIT(A). In the paper book filed before us also, no such evidence has been brought on record to establish that the date-wise cash payment noted by the Assessing Officer is not payment to one party but to different parties. Hence, on this issue also, we feel that the order of CIT(A) is not sustainable and therefore, we reverse the same and restore that of the Assessing Officer. - Decided against assessee Addition of various expenses - Held that:- This disallowance was partly deleted by CIT(A) on the basis that the disallowance of 2.5% was made by the Assessing Officer on ad hoc basis and in the opinion of CIT(A), the disallowance of 1% is reasonable. In this manner, he reduced the disallowance to ₹ 15,55,749/- as against disallowance of ₹ 38,89,360/- made by the Assessing Officer. Considering the facts of the present case, we feel that there is no infirmity in the order of CIT(A) on this issue. Hence, we decline to interfere in the order of learned CIT(A) - Decided against revenue Addition of damage and storage expenses - Held that:- CIT(A) held that right from loading, unloading till the material is used at its final stage, there is shortage at every stage and the damage to material is caused by natural factors i.e. by passersby, by theft, by wastage, by short weighing and measuring and so many other factors. After noting down these facts, it is noted by CIT(A) that the disallowance should be restricted to ₹ 25,000/- and in this manner, he allowed relief of ₹ 5,77,731/- on this issue. Considering the facts of the present case, we find no infirmity in the order of CIT(A) on this issue.- Decided against revenue
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