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2020 (6) TMI 202 - AT - Income TaxUnverified commercial advance - Addition deleted by CIT-A - HELD THAT:- Assessee has a regular trading account of M/s Sona Trading Company to which regular sales are made and payments received through banking channel. The revenue authorities have not raised any question on the genuineness of the transactions. We, therefore, find no inconsistency in the finding of Ld. CIT(A) and the same is upheld. Ground no.1 of the revenue’s appeal is dismissed. Addition of unexplained/unsecured loans/cash credit - Addition deleted by CIT-A - HELD THAT:- Assessee has filed confirmation letters with the name, address and PAN No. of all the creditors. Most of the loan accounts were squared off during the year, all the transactions were carried out through proper banking channel. All the transactions have also passed through the eyes of the auditor who has issued tax audit report under section 44AB of the Act mentioning about the loans taken and repaid during the year. There is no evidence on record to shows that any enquiry was initiated by the assessing officer on the basis of PAN No. and other details. CIT(A) has rightly appreciated the evidence filed by the assessee and considering them to be sufficient enough to prove identity, genuineness and creditworthiness of the loan transactions. We, therefore, find no reason to interfere in the finding of Ld. CIT(A) deleting the addition. Addition on account of Chukara Khata - HELD THAT:- The transactions are not directly between the assessee and the farmers but are through the Mandi and the employees of the Mandi maintain complete records of the transactions entered into between assessee and farmers. Generally the payments are to be made on the same date but it’s strictly compliance is very hard to achieve. Ld. Counsel for the assessee has referred to various instances in the form of Newspaper cutting placed at page 18 of the paper book showing that payments to farmers remain outstanding on various occasions Even otherwise revenue authorities have not doubted the genuineness of the purchase and have not rejected the books of accounts. We, therefore, in the given facts and circumstances of the care, are of the considered view that there is no infirmity in the detailed finding of the Ld. CIT(A), and therefore, the addition made. Disallowance of expenses being 20% of the expenses out of salary wages and Hamali expenses, disallowance being 20% to freight expenses - HELD THAT:- Whether the books of accounts are duly audited u/s 44 AB of the Act and the ledger account of the expenses placed in the paper book, restrict the disallowance to 10% as against 20% made by the assessing officer. Thus, as against the disallowances made by the assessing officer, we confirm the disallowance being 10% of salary wages and Hammali and being 10% of freight expenses. Thus, ground no.4 & 5 of the revenue’s appeal are partly allowed. Evidences in violation of provision of Rule 46A of the IT. Rules - HELD THAT:- We find that the additional evidences placed by the assessee before the ld. CIT(A) through application u/s 46A of the I.T. Rules were going to the root cause of the issues i.e. additions made by the assessing officer. They mainly constituted the documents and evidences given in order to prove the identity, genuineness and creditworthiness of the cash creditors. CIT(A), in order to adjudicate the issues on merits and in the light of the facts was justified in accepting the application under Rule 46A of the I.T. Rules for admission of additional evidences.
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