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2015 (4) TMI 48 - ITAT DELHI

2015 (4) TMI 48 - ITAT DELHI - TMI - Unexplained (unsecured) loans - CIT(A) deleted the addition - Held that:- The claimed unsecured loan was supported with sufficient documents and the Learned CIT(Appeals) after discussing the explanation of the assessee in this regard has deleted the addition by passing a reasoned order. We are thus not inclined to interfere therewith - Decided against revenue.

Disallowance of depreciation - the assessee did not produce original bills/challan for ve .....

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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.- Decided against revenue.

Disallowance of commission - addition made by AO with this finding that he was not s .....

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nclined 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, furnished the confirmation letters from the shareholder containing the details of amount invested, cheque no., date, bank particulars, PAN and .....

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nial of the genuineness of the claimed transaction. No such effort has been on the part of the Assessing Officer to examine the correctness of above stated documents filed by the assessee to establish the genuineness of the transactions in question. See CIT vs. Lovely Exports (P) Ltd. (2008 (1) TMI 575 - SUPREME COURT OF INDIA), CIT vs. Value Capital Services (2008 (4) TMI 263 - DELHI HIGH COURT) & Bhav Shakti Steel Mines (P) Ltd. vs. CIT (2008 (12) TMI 22 - DELHI HIGH COURT) - Decided against r .....

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the Learned CIT(Appeals) has erred in deleting the addition of ₹ 9,21,608 made by the A.O. under sec. 68 of the Income-tax Act, 1961 being the unexplained loans disclosed income. 2.1 The Learned CIT(Appeals) ignored the fact that the assessee has not produced documents/evidence in support of his claim before the A.O. during the assessment proceedings. 3. On the facts and in the circumstances of the case and in law, the Learned CIT(Appeals) has erred in deleting the addition of ₹ 2,83 .....

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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, t .....

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ettlement Commission abated the proceedings relating to assessment years 1995-96 and 1996-97 on 31.3.2008. Thereafter, the assessment was completed under sec. 143(3) determining the total income for the assessment year 1995-96 at ₹ 29,67,780. 5. The relevant facts on the issue raised in the grounds 2 and 2.1 are that the Assessing Officer made addition of ₹ 9,21,608 under sec. 68 of the Act on account of unexplained (unsecured) loans. The Learned CIT(Appeals) being satisfied with the .....

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the assessee was not able to establish the genuineness of the claimed unsecured loans. 7. The Learned AR on the other hand tried to justify the First Appellate Order on the issue. He submitted that all the necessary evidence as well as details of unsecured loans were filed before the Assessing Officer and the Assessing Officer has made the addition only on the basis that the assessee could not produce bank statement without examining the veracity of the evidence. He also referred page Nos. 3 to .....

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ted 11.1.2008 (Delhi High Court); CIT vs. Fair Finvest Ltd. (ITA No.232 of 2012 dated 22.11.2012 (Delhi High Court) ); CIT vs. Nova Promoters & Finlease (P) Ltd. (2012) -206 Taxman 207(Delhi) and CIT vs. Dwarkadhese Investment (P) Ltd. (2010) - 194 Taxmann 43 (Delhi) etc. 8. Considering 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 establis .....

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ted 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 certificate issued by .....

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ant, the findings of the A.O. and the facts on record. The Assessing Officer found that there was addition in cash creditors to the extent of ₹ 35,94,608 during the year under consideration. Out of the above, the additions in cash creditors to the extent of ₹ 21,53,000 and ₹ 5,20,000 were accepted by the Assessing Officer on the ground that the said amounts were declared by the assessee company and Shri Bansi Lal Nandwana, Director of the company respectively under the VDIS Sch .....

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₹ 1,95,000 was also declared under VDIS Scheme, 1977. In this connection, the certificate under sec. 68(2) of the VDIS, 1977 issued by the then Learned CIT(Appeals)-II on 09.02.1998 was furnished which indicates that an amount of ₹ 44,55,490 for assessment year 1994-95 was declared by the assessee company and the amount of ₹ 5,82,000 is included in the amount of ₹ 44,55,490. It is also important to note that the amount of ₹ 44,54,490 includes the amount of ₹ .....

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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 A .....

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increase of ₹ 22,608 on account of unsecured loan from Shri Bansi Lal Nandwana during the year under consideration which may be treated as the amount inclusive of ₹ 5,20,000 which has been declared by Shri Bansi Lal Nandwana as loan to the company in the disclosure made under VDIS 1977. Hence, the amount of ₹ 19,608 also stands explained. In view of the aforesaid, I am of the considered view that the Assessing Officer was not justified in making addition of ₹ 9,21,608 and .....

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dingly rejected. Ground Nos. 3 and 3.1: 10. The Assessing Officer disallowed claimed depreciation of ₹ 2,83,929 on the basis that the assessee did not produce original bills/challan for verification. The Learned CIT(Appeals) has, however, deleted the disallowance. 11. In support of the grounds, the Learned DR submitted that the Assessing Officer was justified in making the disallowance in question since in response to the requirement issued by the Assessing Officer for furnishing date-wise .....

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bills/vouchers in support. The contention of the assessee on the other hand remained that the fixed assets were related to very old period and the assessee had otherwise furnished books of account which was audited by CA with this submission that there was no adverse remarks. Considering these facts of the case, the Learned CIT(Appeals) held that the claim of the assessee regarding depreciation cannot be rejected merely on the ground that bills of purchase pertaining to the acquisition of fixed .....

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n 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 .....

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t there was verbal agreement for payment of commission between the assessee and the consignment agent for so many years and similar claim was allowed by the Assessing Officer in the assessments framed under sec. 143(3) of the Act for the assessment year 2006-07 passed on 30.12.2008, the date on which the assessment under sec. 143(3) of the Act was completed for the year under consideration. 17. We find that the Learned CIT(Appeals) has deleted the addition on the basis that in other assessment y .....

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s erroneous & contrary to facts & law. 12 2. On the facts and in the circumstances of the case and in law, the Learned CIT(Appeals) has erred in deleting the addition of ₹ 14,00,000 made by the A.O. u/s. 68 of the Income-tax Act, 1961 being the unexplained share capital. 2.1 The Learned CIT(Appeals) ignored the fact that the assessee did not discharge the onus of proving the existing/creditworthiness of the creditors and genuineness of the transactions. 3. On the facts and in the c .....

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. being 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 ma .....

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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 decisions cited before the Learned CIT(Appeals). 24. Considering the above submission, we find 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, howeve .....

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ing of initial burden by the assessee to establish genuineness of the transaction, the onus shifts upon the Assessing Officer to rebut those evidences for the denial of the genuineness of the claimed transaction. No such effort has been on the part of the Assessing Officer to examine the correctness of above stated documents filed by the assessee to establish the genuineness of the transactions in question. We are thus of the view that the Learned CIT(Appeals) respectfully following the ratios l .....

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year. The disallowance was made by the Assessing Officer on the ground that the assessee could not produce original bills/vouchers in respect of the addition to fixed assets. The Learned CIT(Appeals) has deleted this disallowance which has been questioned by the Revenue before us. 26. In support of the grounds, the learned Sr.DR submitted that the Learned CIT(Appeals) has deleted the disallowance of depreciation without appreciating that the assessee failed to establish the genuineness of the c .....

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sets 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 .....

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