Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (4) TMI 1433 - ITAT JABALPURUndisclosed investment in stock - excess stock found during the course of survey - HELD THAT:- As observed from the assessment order that on 07/01/2004, the assessee surrendered Rs. 3 Lac as income from undisclosed source as the assessee could not reconcile the difference in stock - AO has simply made the addition of the balance amount being excess stock found during the course of survey without considering the reconciliation submitted by the assessee before him. The addition was made merely on the basis of difference in stock found between the books of accounts and the physical tally of the stock. AO was not justified in rejecting the explanation of the assessee submitted before him together with the reconciliation of the stock without verification and pointing out error therein. No material was brought on record by the Revenue to show that there was in fact any amount of undisclosed income in the form of excess stock more than Rs. 3 Lac disclosed by the assessee. In absence of the same, we find that the addition made by the Assessing Officer and sustained by CIT (Appeals) cannot be upheld. We, therefore, set aside the orders of the lower authorities and delete the addition and allow the ground of appeal of the assessee. Disallowance under the head interest expenditure - AO found that the assessee had paid interest to three persons @ 18%, 20.52% and 19% which was excessive and according to him, the prevailing market rate of interest was 12% - HELD THAT:- We find that the disallowance has been made by AO on account of interest paid to relatives under sec. 40A(2) of the Act. We find that the Assessing Officer has brought no material on record to show that how the interest paid by the assessee was excessive by comparing it with the market rate of interest on loan on the date of taking of the loan by the assessee. In absence of the same, in our considered view, the disallowance made by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeals) cannot be sustained in law, hence, delete the disallowance of interest expenditure and allow the ground of appeal of the assessee.
|