2023 (9) TMI 753 - ITAT CHENNAI

Addition u/s 68 - unsecured loan - HELD THAT:- Once the assessee has discharged the onus cast upon her with regard to identity of the creditors, their creditworthiness and genuineness of transactions, we are of the considered opinion that there would not be any case for the Department to treat the credits as unexplained under section 68 of the Act. Moreover, since the Department has accepted the deletion of addition of ₹. 45 lakhs loan on similar facts and circumstances, we are of the considered opinion that the Department has no case to find fault in the appellate order towards deleting the addition on account of unsecured loan received by the assessee to the extent of ₹. 2.40 crores along with interest on the above unsecured loans. Accordingly, the grounds raised by the Revenue are dismissed.

Unsecured loan from minors - assessee has submitted that both the minors have received gifts in the previous assessment year and the amounts were lying in the bank accounts of the minors unused. Thus, the minors offered loans to the assessee out of their savings - HELD THAT:- It is an admitted fact that the minors have been receiving gifts in earlier years. In fact, there was no debit entry in their SB account. To offer a loan, credit balances in their accounts are required. Out of their bank balance, the minors have offered loans to the assessee. When they have sufficient credit in their accounts, creditworthiness cannot be questioned. More so, both the minors have furnished their income tax returns, which were duly agreed by the Department. Thus, we are of the opinion that the ld. CIT(A) was not correct to held that the minors have no independent source of funds to advance the loans. Accordingly, we reverse the orders of authorities below and delete the addition as well as interest relating thereon - Thus, the ground raised by the assessee is allowed.

Addition on account of factory maintenance expenditure - HELD THAT:- Once the assessee has furnished detailed confirmation of payment on accounts of factory maintenance expenses, to prove the identity of Shri S. Srinivasalu, copy of Aadhar, PAN, ITR, etc. were brought on record, we are of the considered opinion that the assessee has discharged the primary onus cast upon her and thus, the above addition made by the Assessing Officer is liable to be deleted. Accordingly, The addition made on account of disallowance of factory maintenance expenses stands deleted and the ground raised by the assessee is allowed.

Addition towards payment of electricity charges - HELD THAT:- As assessee claims to have made payment to the TNEB and the element of personal usage cannot be ruled out in the absence of production of electricity bills, we sustain the addition to the extent of ₹. 2,00,000/- out of addition confirmed by the ld. CIT(A) to the extent of ₹. 5.00 lakhs and the balance addition of ₹. 3,00,000/- stands sustained.

Addition being depreciation and vehicle maintenance expenses - HELD THAT:- In this case, 10% of the expenditure on maintenance of car was disallowed towards personal use, thereby, the ld. CIT(A) has observed that the Assessing Officer was justified in disallowing 10% of the depreciation on car. Since the assessee has not given the correct depreciation on car claimed, the Assessing Officer has taken 10% of the total depreciation claimed under the 15% block and disallowed the depreciation. Accordingly, the ld. CIT(A) confirmed the disallowance of ₹. 2,27,817/- under depreciation and total disallowance under car maintenance expenses. We find no infirmity in the above findings of the ld. CIT(A) and thus, the ground raise by the assessee is dismissed.

Addition on account of insufficient drawings over and above the addition made by the AO - HELD THAT:- Considering the turnover of the assessee at about ₹. 37 crores and also drawing of ₹. 12,00,000/- as salary from Metro Power Transmission (P) Ltd. during the previous year 2013-14, the drawings towards personal expenses shown by the assessee appears to be very low and accordingly, the Assessing Officer enhanced an additional amount of ₹. 2.00 lakhs. CIT(A) has also observed that the addition of another 2 lakhs thereto the personal expenses appears to be reasonable and fair in totality of the facts and circumstances of the case. Thus, we find no reason to interfere with the order passed by the ld. CIT(A) on this issue and accordingly, the ground raised by the assessee is dismissed.

Partly confirming the computation of income from house property - HELD THAT:- assessee claimed that the property was vacant for the whole year and not let out for any period during the year, the ld. CIT(A) opined that the assessee may not be entitled to any relief and has to pay tax on the notional rent. Accordingly, the ld. CIT(A) confirmed the findings of the Assessing Officer that the notional rent has to be assessed as property income. However, since the Assessing Officer has assessed the entire gross rental of ₹. 5.40,000/- as income without giving statutory deduction at 30% of the annual value, the ld. CIT(A) has confirmed the addition to the extent of ₹. 3,78,000/- after granting statutory deduction of ₹. 1,62,000/- being 30% of ₹. 5,40,000/-. Before us, the ld. Counsel for the assessee could not controvert the above findings of the ld. CIT(A) and accordingly, the addition confirmed by the ld. CIT(A) stands sustained.

Appeal filed by the assessee is partly allowed and the appeal of the Revenue is dismissed.