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2023 (6) TMI 347 - ITAT AHMEDABADAddition u/s 68 - unsecured loan - addition being made for the reason that the assessee was unable to discharge the onus of proving the genuineness of the transactions in terms of section 68 - CIT-A deleted the addition - HELD THAT:- Assessee furnished address of the said party, as also PAN of the said party. CIT(A) further noted that the AO had found no infirmity in the above details submitted by the assessee i.e. in the information filed by the assessee or the details of the said party filed by the assessee, as also, the details of transaction of unsecured loans taken by the assessee. On the contrary, he noted that the despite all information in the possession of the AO, he chose not to make any further inquiries regarding genuineness of the transaction. He noted that the AO frivolously emphasised the fact of non-reporting of this transaction by the tax auditor in the audit report. CIT(A) found this fact of the impugned transaction not being reported by the tax auditor as of no consequence, because the transaction, he noted was duly reflected in the financial statement of the assessee i.e. balance sheet of the assessee, which was also audited by the same auditor, who had conducted tax audit. Therefore, non-reporting of the transaction in the tax audit report could be an error and had no implication on the fact of receipt of unsecured loans by the assessee from the aforesaid party, he held. DR was unable to controvert the factual finding of the CIT(A) before us, nor was he able to demonstrate as to when all the relevant documents, as noted by the assessee being confirmation, copy of bank statement of the assessee, PAN of the party giving unsecured loans, were all filed by the assessee and no infirmity was found in the same by the AO, why the transaction still be held to be not genuine . We see no reason to interfere in the order of the ld.CIT(A) deleting the addition u/s 68 of the Act being unsecured loans taken by the assessee from one M/s.Pushparaj Corporation. Addition as deemed dividend u/s 2(22)(e) - whether the amount would be taxable in the hands of the assessee-concern which surely is not a shareholder in two entities which had granted loans & advances? - HELD THAT:- The assessee who had received advances from the said two concerns, was not a shareholder of these concerns, therefore, even though the advances qualified as deemed dividend in terms of section 2(22)(e) of the Act, they cannot be taxed in the hands of the assessee. Thus, order of the CIT(A) deleting the addition made on account of deemed dividend is accordingly upheld. Disallowance of Expenses relating to labour and transportation charges - CIT-A deleted the addition - HELD THAT:- CIT(A) as passed a detailed speaking order on the issue and has gone through bills and vouchers of expenses and verified that most of the payments were made through cheques and TDS also deducted therein. He also noted that the AO had not pointed out any specific infirmity in the documents submitted by the assessee but had only made general observations. DR was unable to controvert the factual finding of the ld.CIT(A) as above - we are not inclined to interfere in the order of the CIT(A) deleting the disallowance. Addition of short term capital gain/loss - HELD THAT:- The order of the CIT(A) reveals that during appellate proceedings, the assessee submitted copy of the sale deed and the AO’s comments were sought on the same, to which, we find, the CIT(A) has noted that the AO made no adverse comment with respect to the sale deed in his remand report, but only raised apprehension as to why the assessee incurred loss in such a deal in one month. CIT(A), we find, has also noted that both the purchases and sales were made on values more than the jantri value and the details of seller and purchaser were available in the purchase and sale deed, but the AO did not verify the transaction. CIT(A) held that the disallowance made by the AO was not sustainable since all documentary evidences substantiating the transaction were furnished by the assessee, which were not doubted by the AO and the disallowance made by the AO was a mere adhoc disallowance - no reason to interfere in the order of the ld.CIT(A) deleting the addition on account of short term capital gains. Disallowance of labour and transportation charges - HELD THAT:- Assessee has been unable to controvert the finding of the CIT(A) and we therefore, we hold that the CIT(A) has been fair enough to restrict the disallowance to 10% of unsubstantiated labour and transportation charges, and there is no merit in the ground no.2 raised by the assessee before us.
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