TMI Blog2015 (4) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... The Learned CIT(Appeals) has accordingly directed the Assessing Officer to allow deprecation on the fixed assets purchased during the year under consideration in accordance with the admissibility thereof after necessary verification.- Decided against revenue. Disallowance of commission - addition made by AO with this finding that he was not satisfied with the explanation furnished by the assessee in this regard in absence of written agreement between the assessee and consignment agents - CIT(Appeals) deleted the addition - Held that:- IT(Appeals) has deleted the addition on the basis that in other assessment years, similar claim was allowed and the Assessing Officer ought to have maintained consistency in this regard even during the year under consideration. The First Appellate Order on the issue is reasoned one, hence, we are not inclined to interfere therewith.- Decided against revenue. Unexplained share capital - CIT(Appeals) deleting the addition - Held that:- The assessee, about the non-furnishing of bank statement had stated that they had approached to the bank to get the bank statement but failed to, because it was more than 13 years old. The assessee has, however, fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions made to the fixed assets. 4. On the facts and in the circumstances of the case and in law, the Learned CIT(Appeals) has erred in deleting the addition of ₹ 3,89,936 made by the A.O. being unexplained commission. 4.1 The Learned CIT(Appeals) ignored the fact that the assessee failed to produce copies of agreement with consignee agents for payment of commission. 2. Heard and considered the arguments advanced by the parties in view of orders of the authorities below, material available on record and the decisions relied upon. 3. Ground No.1 is general in nature, hence, does not need independent adjudication. 4. Ground Nos. 2 and 2.1: The basic facts are that the assessee company is engaged in the business of manufacturing of basic drugs and pharmaceuticals. During the year, the assessee filed its return of income at ₹ 6,500. The search operation was carried out at the premises of the assessee by the Anti-evasion Branch of Central Excise Department which was followed by a survey operation under sec. 133A of the Income-tax Act, 1961. The assessee company filed an application under sec, 245C(1) of the Income-tax Act, 1961 for the assessment year 1995-96 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidering the above submissions, we find that the Assessing Officer had made addition of ₹ 9,21,608 on the basis that the assessee had failed to discharge its onus as required under sec. 68 of the Act to establish the genuineness of the claimed unsecured loans. The Assessing Officer has noted that the assessee company filed the confirmation letters from the cash creditors. There was addition in cash creditors of ₹ 35,94,608 during the year under consideration. Out of this, addition of ₹ 21,53,000 was declared bogus by the assessee company in the VDIS Scheme 1997 and ₹ 5,20,000 was declared its income in VDIS Scheme 1997 by Mr. Bansi Lal Nandwana, director of the assessee company. He noted further that since the assessee could not produce any documentary evidence e.g. bank statement, he was left with no option but to hold these remaining loan transactions of ₹ 9,21,608 (Rs.35,94,608 - ₹ 21,53,000 - ₹ 5,20,000) as unexplained cash credits under sec. 68 of the Act. The Learned CIT(Appeals) after discussing the case of the party in detail has decided the issue vide para Nos. 4.1 and 4.2 of the First Appellate Order. He mentioned that since cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount of ₹ 1,96,000 is also included on account of equity shares in the assessee company held in the name of one Smt. Jamna. Apart from the above, a documentary letter dated 04.12.2008 was also submitted the perusal of which reveals that Smt. Raj Kumari, 27-C, LIG Flats, Ram Pura, Delhi has advanced a loan of ₹ 1,24,000 during the year under consideration i.e. assessment year 1995-96. Her PAN is AAJPK4743M and she is assessed to tax with ITO, Ward- 21(3), New Delhi. It is also pertinent to mention that the aforementioned certificate and confirmatory letter of Smt. Raj Kumari were available with the Assessing Officer during the assessment proceedings and therefore, they are not considered to be additional evidences in terms of Rule 46A of I.T. Rules, 1962. 4.2 In view of the discussion made above, it is held that the amount of ₹ 5,82,000, ₹ 1,96,000, ₹ 1,24,000 totalling ₹ 9,02,000 stand explained in respect of which the addition cannot be sustained. Regarding the balance amount of ₹ 19,608, it is seen in the accounts of the assessee company that there has been increase of ₹ 22,608 on account of unsecured loan from Shri Bansi Lal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase pertaining to the acquisition of fixed assets were not made available to the Assessing Officer. He noted that the Assessing Officer has not given his finding to the fact that the machinery and plants or other fixed assets have not at all been used during the accounting year under appeal or were kept idle. He noted further that the auditors have not made any adverse remarks in the tax audit report for the assessment year under consideration. The Learned CIT(Appeals) has accordingly directed the Assessing Officer to allow deprecation on the fixed assets purchased during the year under consideration in accordance with the admissibility thereof after necessary verification. We do not find infirmity in the First Appellate Order in this regard. The same is upheld. The ground Nos. 3 and 3.1 are accordingly rejected. Ground Nos. 4 and 4.1: 14. The Assessing Officer disallowed ₹ 3,89,936 claimed to have been paid as commission. The addition has been made by the Assessing Officer with this finding that he was not satisfied with the explanation furnished by the assessee in this regard in absence of written agreement between the assessee and consignment agents. The L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g unexplained unsecured loan. 4.1 The Learned CIT(Appeals) ignored the fact that the assessee did not discharge the onus of proving the existence/creditworthiness of the creditors and genuineness of the transactions. 20. Ground No.1 is general in nature, hence, does not need independent adjudication. 21. Ground Nos.2 and 2.1: The Assessing Officer made addition of ₹ 14 lacs under sec. 68 of the Income-tax Act, 1961 on account of unexplained share capital. The Assessing Officer has made the addition in question for want of bank statement. The Learned CIT(Appeals) has deleted the addition on the basis of evidence filed by the assessee with this observation that the Assessing Officer did not bother to examine the correctness of those evidences before making the addition. 22. In support of the grounds, the Learned DR placed reliance on the assessment order with this contention that despite having sufficient opportunity, the assessee failed to discharge its onus to establish the genuineness of the claimed share capital. 23. The Learned AR tried to justify the First Appellate Order on the issue. He reiterated the submission made before him and placed reliance on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late Order. 28. Considering the above submissions, we find that the Assessing Officer had disallowed the claimed depreciation of ₹ 3,96,639 in respect of additions made to the fixed assets during the year in absence of production of original bills/vouchers of the additions made to the fixed assets by the assessee. The submission of the assessee before the Learned CIT(Appeals) remained that the addition to fixed assets relates to very old period, hence, the assessee could not produce original bills/vouchers. It was submitted that the books of account of the assessee company have been audited by Chartered Accountant and there is no adverse remarks in his report. The copy of audited balance sheet as on 31.3.1996 was also furnished. The Learned CIT(Appeals) has deleted the disallowance of the depreciation in question on the basis that the Assessing Officer has not given a finding that the machinery and plant or other fixed assets have not at been used during the accounting year under appeal or were kept idle and that the auditors have not made any adverse remarks in the tax audit for the assessment year under consideration. The Learned CIT(Appeals) has, however, directed the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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