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2016 (4) TMI 664 - AT - Income TaxUnsecured loans u/s 68 - Held that:- The assessee has furnished only one confirmation of Shri Deoki Nandan Jhunjhunwala in respect of fresh loan of ₹ 2.40 lac from Ms. Anita Jhunjhunwala but for this loan also, apart from furnishing confirmation, the assessee has furnished nothing else before us also about creditworthiness of this loan creditor. Hence, it is seen that for none of the loan creditors, the assessee has furnished any evidence regarding the creditworthiness of the loan creditor and except one loan creditor, no confirmation has been filed by the assessee. Under these facts, we find no infirmity in the order of learned CIT(A) in making The addition - Decided against assessee Addition in respect of interest on FDRs - Held that:- On the actual amount of FDR of ₹ 21,51,446/-, the estimate by Assessing Officer stands at ₹ 2,15,000/- and since the assessee has already accounted for FDR interest as income to the extent of ₹ 1,87,983/-, CIT(A) has confirmed the addition of ₹ 27,107/- being the difference in 10% of closing FDR balance and FDR interest shown by the assessee as income. In our considered opinion, since the amount of FDR interest shown by the assessee as income is very much close to even the estimation by the Assessing Officer and CIT(A) in the absence of details and this is the claim of the assessee that interest income was accounted for by the assessee on actual basis, we hold that in the facts of the present case, the addition upheld by CIT(A) is not justified. We, therefore, delete the same - Decided in favour of assessee Addition being increase in Security Deposits under the head "Current Liabilities" over the last year - Held that:- In the copy of ledger account of Shiva Steel, Lucknow customers with opening debit balance of ₹ 1,25,939/- and there is no corresponding credit entry available in its customer account on account of transfer from Shiva Steel security deposit on 16/04/2007. Hence, it is noted that this contention that security deposit is transferred to the customer account is not being supported by the copy of ledger account of Shiva Steel, Lucknow customer. Regarding the second party i.e. Madhyeshiya Traders, the copy of ledger account of Madhyeshiya Traders of the customers is available on page No. 166 of the paper book and in this amount a credit of ₹ 50,000/- is on 05/05/2007 on account of transfer from security deposit account. We also find that in the customer account also, there is opening balance of ₹ 1 lac for this party. Under these facts, we are of the considered opinion that the addition made by the Assessing Officer in respect of this security deposit from Madhyeshiya Traders is not justified because the assessee could show that the security deposit of the present year was adjusted in the customer account of next year. Therefore, this addition of ₹ 50,000/- is deleted. In respect of third party i.e. Anil Kumar Mishra, we feel that for this small amount of ₹ 2,000/-, it cannot be said that the assessee could not establish the creditworthiness etc. of the person from whom this security deposit has been received and therefore, we delete this amount also. In this manner, the assessee gets part relief of ₹ 52,000/- and balance addition is confirmed.- Decided in favour of assessee in part Addition being interest and finance charges - Held that:- We find that out of interest claimed by the assessee, there is no outstanding amount except interest on ICD ₹ 1,18,588/- but for interest on ICD, section 43B is not applicable. Similarly, regarding discounting charges paid to various parties, there is some outstanding amount also. For instance ₹ 33,534/- being discounting charges of Ketan Mehta available on page No. 105 of the paper book and ₹ 20,726/- being discounting charges payable to Jitendra M. Shah HUF available on page No. 104 of the paper book but for discounting charges also, section 43B is not applicable and hence, this is noted that to all those claims regarding interest expenditure to which section 43B is applicable, there is no outstanding amount and for the remaining amount of interest and discounting charges, section 43B is not applicable and therefore, disallowance made by Assessing Officer is not justified. We, therefore, delete the same - Decided in favour of assessee Disallowance being 25% of the expenses on repair & maintenance of plant & machinery, building and others - Held that:- Incurring of expenses for repairing of plant & machinery has no direct correlation with the increase or decrease in sales and therefore, merely on this basis that the turnover has gone down, the repairing expenses cannot be disallowed. Regarding this objection that the details and evidences are not produced, it has been submitted before CIT(A) as per written submissions dated 25/03/203 that the ledger accounts of expenses under this head are being produced and in the earlier year, there was no disallowance under this head and all the expenses are vouched but there is no finding given by CIT(A) that these assertions of the assessee in the written submissions are incorrect. Hence, ad hoc disallowance under this head is not justified. We, therefore, delete the same - Decided in favour of assessee Disallowance being 40% of the expenses under the head salary, wages and bonus - Held that:- As per the audited accounts available , the details of employees remuneration and benefits of the current years and preceding years are available on page 30 of the paper book and as per the same, in the present year, the amount claimed is ₹ 448.55 lac as against the claim of ₹ 439.38 lac in the preceding year. As per the Assessing Officer in the assessment order, the claim under this head was ₹ 609.08 lac but this is the explanation of the assessee before CIT(A) that this amount included the amount of provision of gratuity which has been separately disallowed by Assessing Officer as per Para 5 of the assessment order and after excluding this amount, the claim under this head is almost equal to the claim under this head in the preceding year. There is no other reasoning given by the Assessing Officer for making these disallowances except stating that the claim in the present year is almost double. But when this is not factually correct after excluding the amount of gratuity of ₹ 247.08 lac separately disallowed by the Assessing Officer, no disallowance is justified - Decided in favour of assessee Disallowance of expenses claimed under various heads, such as power & fuel, effluent treatment expenses, misc. expenses, freight, transport & handling charges etc. - Held that:- From the chart of these expenses in the present year and preceding year, it is seen that these expenses have gone down to ₹ 614.58 lac as against ₹ 704.98 lac in the preceding year. Therefore, we feel that no disallowance under these heads is called for in the facts of the present case. We, therefore, delete the same.- Decided in favour of assessee Inclusion of Extraordinary income to the total income of the assessee - Held that:- No reason to interfere with the order of CIT(A) because when an income is included by the assessee itself in the computation of income filed by the assessee along with the return of income, if the assessee pleads that such amount is not be included in the total income then supporting evidence has to be brought on record by the assessee in support of this contention but since the assessee has not done so, we decline to interfere in the order of CIT(A). - Decided against assessee
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