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2015 (2) TMI 1036 - AT - Income TaxAddition made u/s 68 - assessee claimed that the amounts were repaid through its sister concerns - Held that:- In the absence of any documentary evidence to prove the genuineness of transaction and creditworthiness of the creditors, the explanation of the assessee does not inspire confidence. The assessee’s contention before us that what is being doubted is the ‘repayment’ and not the ‘credit’ itself, again, only needs to be stated to be rejected. Section 68 applies only to a credit appearing in the books of account of the assessee, so that the fact or the existence of the credit is a condition precedent for the application of section. The several doubts, which we have held as valid, qua repayment, only exhibit that the genuineness of the credit/s, i.e., of it representing a genuine liability of the assessee, is in serious doubt, much less proved, as required, i.e., if it is not to be considered as the assessee’s income in view of section 68 of the Act, the case law on which is legion. Accordingly, in the facts and circumstances of the case except in the case of Textile Product Marketing Agency where there is actual transaction of supply of goods, in all other cases we do not find any error or illegality in the orders of authority below. Hence the addition under section 68 in respect of 21 parties is confirmed. - Decided against assessee. Adhoc disallowance of motor car expenses, depreciation and telephone expenses - AO has disallowed 20% of the expenditure debited on account of motor car, depreciation and telephone on the ground of personal use of car and telephone - Held that:- Disallowance was made by AO because the assessee has not produced the log book for running the car to verify the exclusive use of car for business purposes. Similarly the personal use of telephone was not ruled out because the assessee has not furnished the details. Thus as the assessee being a partnership firm the personal use of car and telephone cannot be ruled out. However, the disallowance of 20% in our view is excessive and we find that 10% of the disallowance on account of personal use will be just and proper. Accordingly we restrict the disallowance of expenses on account of car depreciation and telephone to 10%. - Decided partly in favour of assessee.
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