TMI Blog2015 (6) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 601 - GUJARAT HIGH COURT ), would not be applicable to the case of the assessee. Considering the facts of the case and the arguments of both the sides, we do not find any justification to interfere with the order of the CIT(A) on this point and the same is sustained. - Decided against assessee. Disallowance of expenses - Held that:- CIT(A) considered each and every expenses and has sustained the disallowance only when the expenditure was not allowable. The ld. Counsel for the assessee was unable to controvert the findings recorded by the CIT(A). - Decided against assessee. Disallowance of expenses - CIT(A) confirmed part disallowance - Held that:- When all the expenses debited to the profit and loss account have been considered for disallowance, the disallowance sustained at 20% of all the expenses is excessive. We, therefore, reduce the same to 10% and direct that the disallowance be restricted to ₹ 7,53,987/-. - Decided partly in favour of assessse. - ITA No. 3278/Ahd/2009 - - - Dated:- 15-5-2015 - Shri G.D.Agrawal and Shri Rajpal Yadav, JJ For the Petitioner: Shri Hardik Vora, AR For the Respondent: Shri Roop Chand, Sr. DR. ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.4,04,469/- Shri Viral N. Patel - Rs.4,04,469/- ----------------- Total Rs.8,08,938/- ========== 5. On verification of record, the Assessing Officer found that the assessee has not filed its return of income for Assessment Year 2004-05. No other documentary evidence in support of partners opening capital was furnished. He, therefore, treated the sum of ₹ 8,03,938/- as unexplained credit u/s 68. During the course of appeal before the CIT(A), the assessee pointed out that the return of income of the partners was filed for Assessment Year 2004-05; however, on verification of the return, he found that the return was filed by Shri Navnitbhai B Patel-individual and there is no evidence of these amounts showing as closing balance in that year. The relevant finding of the CIT(A) reads as under:- 3.3 . To explain the source of this contribution, the appellant sought to show that a return of income of the partn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held as under:- 13. Applying the aforesaid principles to the facts of the present case, it is apparent that the assessee had furnished the details which would discharge the onus which lay on the assessee. It is not the case of the revenue that the partners of the assessee firm are fictitious. The income-tax officer has not disputed that the credits in the accounts of the partners were not deposits from the partners. Moreover, it is an admitted position that this was the second year of the firm, and that it was running in loss. It is true that the Income-tax Officer did not accept the explanation given on behalf of the assessee in respect of the new deposits or cash credits in the accounts of the partners. The mere non-acceptance of that explanation does not however provide material for finding that the said sum represented income of the assessee firm. As held by the Allahabad High Court in the case of CIT, Allahabad vs. Jaiswal Motor Finance (supra) in the absence of any material to indicate that there were profits of the firm, the amount credited to the partners accounts could not be assessed in the hands of the firm. Once the partners have owned that the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, Ground No.4 of the assessee s appeal is rejected. 8. Ground No.5 of the assessee s appeal reads as under:- 4.0 The learned Commissioner of Income-tax (Appeals) erred in law and on facts in confirming the disallowances to the extent of ₹ 3,24,921/- out of total disallowances of ₹ 9,74,514/-. 9. We have heard both the parties and perused the material placed before us. We find that the Assessing Officer has disallowed various expenses amounting to ₹ 9,74,514/-; the details of which are as under:- Sr. No. Nature of expenses Amount 1 Freight inward and octroi 84360 2 Testing charges 112370 3 Consulting expenses 178690 4 Legal and professional charges 139631 5 Freight outward expense 399463 6 Security charges 60000 Rs.9,74,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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