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2020 (12) TMI 72 - AT - Income TaxUnexplained cash credit u/s 68 - burden of proving identity and creditworthiness of the lender - HELD THAT:- As furnished the copy of return of income for the AY 2009-10, balance sheet for the AY 2009-10, loan confirmation documents, copy of bank statements, reflecting transaction during the period 01.04.2008 to 31.03.2009 and copy of bank statement reflecting the said transaction during the relevant period. DCIT has asked for rejection of assessee’s contention on the ground that Mr. Cyrus Nallaseth has stated that balance sheet for the AY 2009-10 is not relevant in the present case. We do not find any substance in the observation of the AO, as there is no evidence on record to show that Shri Cyrus Nallaseth was asked by the AO to furnish the relevant balance sheet. Since, the AO has admitted in the remand report that Shri Cyrus Nallaseth had advanced loan to the assessee there is no justification in making addition on account of unexplained cash credit u/s 68 - assessee has established the genuineness of the transaction by discharging the burden of proving identity and creditworthiness of the lender - Decided in favour of assessee. Disallowance of vehicle expenses, salary expenses and purchase expenses - Whether AO had made these disallowances on ad-hoc basis, which is not permissible under the law? - HELD THAT:- CIT(A) has confirmed/restricted the disallowances in question inter alia on the ground that the assessee has shown more business loss as compared to the earlier year - authorities below have not given any cogent reason for making/confirming disallowance in question. Hence, respectfully following the ratio laid down in WALCHAND AND COMPANY PVT. LIMITED. [1967 (3) TMI 2 - SUPREME COURT] we hold that the ad-hoc disallowance made/sustained on the ground of increase of business loss is not sustainable. Hence, we delete the additions made on account of vehicle expenses, salary expenses and purchase expenses. - Decided in favour of assessee.
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