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2015 (11) TMI 1887 - AT - Income TaxAddition on account of trade creditors - Addition u/s 68 - HELD THAT:- All the parties have confirmed these purchase transactions but the AO wanted their creditworthiness. These are simply trade creditors and all of them supplied machinery to the assessee. Supply of machinery is not in doubt. These are not unsecured loans. Once this is the position, the AO cannot invoke the provisions of section 68 - All the parties have confirmed having made sales to assessee in response to notice u/s. 133(6) - In the case of trade creditors, at the best, first of all, the AO has to doubt the purchases and sales and without going into these facts, the AO applied the provisions of section 68 of the Act in the absence of creditworthiness of these parties and made addition. No reason to sustain the same, as the very basis is not doubted by the AO, and assessee has discharged its onus by filing all the details before the AO. Accordingly, we confirm the order of CIT(A) and this issue of revenue’s appeal is dismissed. Addition of unsecured loans - HELD THAT:- As both the creditors have confirmed the transaction and also filed details of their assessment particulars and these credits are given out of their bank account but the AO did not carry out any exercise whatsoever to verify these unsecured loans as is clearly evidenced from the assessment order. Even CIT(A)’s finding is that AO has not conducted any further enquiry despite the fact that assessee has discharged its onus by filling the details. Once this is the position, we have no hesitation in confirming the order of CIT(A) and this issue of revenue’s appeal is dismissed. Addition on account of purchase of spare parts - HELD THAT:- From the order of CIT(A), we find that complete details were available before him and on the basis of the same he has allowed the claim of the assessee. Even the sales arising out of the same purchases have not been doubted by the AO. Here in the present case only exception is M/s. Vishal Enterprises wherein it has not verified the veracity of the transaction. Hence, qua this only, we set aside the matter to the file of the AO so that assessee can prove the veracity of the transaction and for the balance purchases, we confirm the order of CIT(A) and this issue of revenue’s appeal is partly allowed. Disproportionate payment of expenses made to persons specified u/s. 40A(2)(b) - HELD THAT:- AO has just made ad-hoc disallowance without going into the expenses or the reasonableness of the payment as mentioned in the provision of section 40A(2)(b) - Assessee has produced complete supporting bills and vouchers to prove the genuineness of the claim of expenditure which is not doubted but he has made ad hoc disallowance for the reason that these payments are made to the persons specified u/s. 40A(2)(b) of the Act for invocation of provision of section 40A(2)(b) of the Act. First of all, there should be a finding recorded by the AO that the expenses are unreasonable and how? But from the order of the AO, it is not coming out that what is the basis for disallowance. Just simply ad hoc disallowance cannot be made. Accordingly, we confirm the order of CIT(A) deleting the addition. This issue of revenue’s appeal is dismissed. TDS u/s 194C - disallowance on account of truck hire charges for non-deduction of TDS - HELD THAT:- From the decision of Vipin Mehta [2011 (5) TMI 503 - ITAT MUMBAI] and the fact in this case is that the assessee has received Form 15- I from the respective payees to whom truck hire charges were paid, the AO has no authority to make any disallowance for non deduction of TDS u/s 40(a)(ia) of the Act. Accordingly this issue of revenue’s appeal is dismissed.
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