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2017 (11) TMI 1542 - ITAT DELHIDisallowance of expenses and depreciation - AO assumed that there was no business activity during the year - Held that:- Assessing Officer has computed the income of the assessee as “income from business” and not income from other sources. We further find the major amount of the administrative expenses relates to the rent and selling and managerial remuneration etc.. Merely because there is meager business the same, in our opinion, cannot be a ground to disallow the various expenses incurred by the assessee. It is not the case of the Assessing Officer that such expenses are bogus or not genuine. He has merely disallowed the same on the ground that the assessee has not done any business during the year. As mentioned earlier the Assessing Officer himself has mentioned in the body of the assessment order that the assessee has done trading of fabric in the month of February and March, 2009. Considering all we are of the considered opinion that the expenses claimed by the assessee under the head administrative and selling expenses and the depreciation cannot be disallowed. We therefore set-aside the order of the CIT(A) and direct the Assessing Officer to allow the expenses. The first ground raised by the assessee is accordingly allowed. Disallowing the unsecured loan - Held that:- Assessee has filed certain details to establish the identity and creditworthiness of the creditor and genuineness of the transactions. However, the above details according to the Assessing Officer are not sufficient to prove the loan transactions in terms of section 68 of the I.T. Act. Further, the Assessing Officer has neither summoned the above parties nor asked the assessee to produce them before him for his examination. For accepting any cash credit/loan transactions as genuine, the onus is always on the assessee to substantiate with evidence to the satisfaction of the Assessing Officer regarding the identity and creditworthiness of the loan creditors and genuineness of the transactions. In the instant case, although certain details were filed these were not properly appreciated by the Assessing Officer nor did he issue summons u/s 131 or called for information u/s 133(6). Considering all we deem it proper to restore the issue to the file of the Assessing Officer with a direction to give one more opportunity to the assessee to substantiate with evidence to his satisfaction regarding the identity and creditworthiness of the loan creditors and genuineness of the transactions.
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