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2020 (3) TMI 417 - AT - Income TaxAddition u/s 68 - None of the twelve companies could be located on the given address from whom the assessee company had claimed to have taken unsecured loan - HELD THAT:- In this case on hand, the assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the loan creditors, thereafter the onus shifted to AO to disprove the documents furnished by assessee. The documents furnished by assessee cannot be brushed aside by the AO without cogent reasons. AO’s action to draw adverse view in the light of the documents discussed supra cannot be countenanced. In the absence of any investigation, much less gathering of evidence by the Assessing Officer, we hold that addition cannot be sustained merely based on inferences drawn by circumstance. We are inclined to uphold the order of the Ld. Commissioner of Income Tax (Appeals) To sum up section 68 of the Act provides that if any sum found credited in the year in respect of which the assessee fails to explain the nature and source shall be assessed as its undisclosed income. In the facts of the present case, both the nature & source of the loan received was fully explained by the assessee. The assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the loan creditors. The PAN details, bank account statements, audited financial statements and Income Tax acknowledgments were placed on AO's record. Accordingly all the three conditions as required u/s. 68 of the Act i.e. the identity, creditworthiness and genuineness of the transaction were placed before the AO and the onus shifted to AO to disprove the materials placed before him. Without doing so, the addition made by the AO is based on conjectures and surmises cannot be justified. In the facts and circumstances of the case as discussed above, no addition was warranted under Section 68 of the Act. Therefore, we do not want to interfere in the impugned order of Ld. CIT(A) which is confirmed and consequently the appeal of Revenue is dismissed. Addition on account of interest payment to bogus loan creditors - AO disallowed the interest expenditure which were paid by the assessee to the aforesaid twelve (12) loan creditors, on the reason that the loan creditors were bogus entities/companies - HELD THAT:- While adjudicating ground nos. 1 & 5 we have found that loan creditors are not bogus companies and that the interest were paid through banking channel and TDS have been duly deducted by the assessee. We find that the ld. CIT(A) has rightly deleted the impugned addition. We confirm the action of the ld. CIT(A) and dismiss this ground of appeal of Revenue. Employees’ contribution of PF/ESI - Addition of non-deposit within due date as prescribed in PF/ESI Act - HELD THAT:- We note that the ld. CIT(A) has given the relief to the assessee after taking note that the assessee had deposited on account of employees’ contribution to PF/ESI before the due date of filing of return of income, which factual finding is corroborated from perusal of pages 35-36 of the PB (Tax Audit Report) from where, we note that the assessee, in fact, had remitted the employees’ contribution of PF/ESI before due date of filing of return of income. Therefore, we confirm the order of the ld. CIT(A) by relying on the decision of the Hon’ble Jurisdictional High Court in the case of Vijay Shree Ltd dt. [2011 (9) TMI 30 - CALCUTTA HIGH COURT] Disallowance being the interest on late payment of TDS - AO disallowed since this amount has been remitted by the assessee for late payment of TDS - HELD THAT:- We note that the ld. CIT(A) has given relief taking note of the decision of this Tribunal in the case of M/s. Narayani Ispat Pvt. Ltd [2017 (10) TMI 67 - ITAT KOLKATA] as well as the decision of the Hon’ble Allahabad High Court in the case of Triveni Engineering Works Ltd. vs Commissioner Of Income-Tax [1983 (10) TMI 49 - ALLAHABAD HIGH COURT] . We note that this issue is no longer res integra. This Tribunal in Narayani Ispat P. Ltd. has decided this issue by holding as under: The issue of delay in the payment of service tax is directly covered by the judgment of Hon'ble Apex Court in the case of Lachmandas Mathura Vs. CIT [1997 (12) TMI 16 - SUPREME COURT] in favour of assessee to conclude that the interest expenses claimed by the assessee on account of delayed deposit of service tax as well' as TDS liability are allowable expenses u/s 37(1) of the Act. The interest expenses claimed by the assessee on account of delayed deposit of service tax as well' as TDS liability are allowable expenses u/s 37(1) of the Act. - Decided against the revenue.
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