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TMI Blog2012 (7) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... is that the Ld. CIT(A) erred in deleting the addition of Rs.75,000/- made by the AO in respect of unvouched expenses debited under various heads, although the expenses remain unproved and unverifiable. 2. The facts stated in the assessment order in respect of unproved sundry creditors are that the balance sheet showed total of such creditors for expenses at Rs.1,66,30,225/-. The assessee was required to furnish confirmed copies of account where ever outstanding balance exceeded to Rs.1 lac. The assessee was not able to furnish such confirmed accounts in respect of 10 parties involving aggregate amount of Rs.29.87,399/- This amount was deducted from the loss computed by the assessee. 2.1 It was submitted before the Ld, CIT(A) that confirma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The liability in respect of M./s D.K. Book Binding of Rs.1,34,836/- was brought forward from the earlier year to which there was no addition in this year. Since there was no cessation of liability, this addition was also deleted. The liability in respect of late Shri B.K. Sharma and his son Shri Ankur Sharma totalling to Rs.5,58,041 was accepted by Smt. Manjula Sharma, the wife of Shri B.K. Sharma, in the statement recorded during remand proceedings. Her son Shri Ankur Sharma was residing in the USA and therefore he could not attend to the proceedings . His liability was also accepted by Smt. Manjula Sharma. These liabilities accrued by way of royalty in respect of books written by them and published and marketed by the assessee. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) The account of D K Book Binding works shows opening balance of Rs.1,34836/-.There is no addition to the liability in this year. This liability has been carried over to the next year and there are debits and credits in the account in Finance Year 2007-08, leading to total liability of Rs.12,48,045/- at the end of the year. The fact is that no addition is there to the liability in this year and it cannot be said that the liability has ceased to exist as the amount has not been credited to profit and loss account. Therefore, it is held that addition in respect of this account was not justified. (ii) The account of Shri B.K. Sharma shows opening balance of Rs.1,44,359/- . Royalty of Rs.2,02,834/- and a further amount of Rs.58,478/- have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.3,54,704/- has been paid to him in subsequent year. He has been paid a sum of Rs.1 lacs during this year against the royalty of Rs.1,24,475/-. Thus the addition deserves to be deleted. Looking to the fact that this is also a running account, we are of the view that addition of closing balance was not justified. (v) The account of Smt. Madhu Chatwal shows opening balance of Rs.3,28,636/-. It has been credited by two sums of Rs.1 lacs and Rs.76,574/- representing the reversal of entries in respect of cheques not deposited by the creditors and her bank. Three payments of Rs.50,000/- each have been made, out of which two entries of Rs.50,000/- each have been reversed. The provision is made for payment amounting to Rs.1,24.475/-. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder, it is mentioned that the aforesaid expenses are not fully vouched as the assessee failed to furnish the vouchers. Ld. CIT(A) mentions that adhoc disallowance was made on the ground that expenses are not fully vouched. The assessee submitted before him that even a single instance of unvouched expense has not been mentioned in the assessment order. Therefore, it has been held that the adhoc disallowance cannot be sustained. 5.1. The submissions of the Ld. Sr. DR before us is that the expenses are not fully vouched and, therefore, adhoc disallowance is justified. The case of the Ld. Counsel is that the expenses are fully vouched as the AO has not mentioned even a single missing voucher. Having considered submissions of both the sides, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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