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2015 (6) TMI 515 - ITAT AHMEDABAD

2015 (6) TMI 515 - ITAT AHMEDABAD - TMI - Addition u/s.68 - CIT(A) deleted the addition - Held that:- There is no dispute with regard to the fact that the identity of the depositors is not doubted. The genuineness of the transaction also established as the same effected through banking channel. The assessee has furnished evidences of the creditworthiness of the persons from whom he has obtained loans. The Revenue has not rebutted the evidences placed by the assessee by placing any contrary mater .....

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ring the year under consideration but the same were taken on rent in A.Y. 2003-04. No such disallowance were made in earlier year. The Ld. Counsel has furnished sufficient evidence for the tenancy of the shop and godown. Such evidences were also independently filed before the Assessing Officer during remand proceedings vide letter dated 11.08.2011. After considering the evidences so filed, there is no justification for disallowing the shop and godown rent - Decided against revenue. - I.T.A. .....

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ion are taken up together and are being disposed of by this consolidated order for the sake of convenience. 2. First, we take up the appeal filed by the Revenue, i.e. ITA No.5/Ahd/2012. The Revenue has raised the following grounds of appeal:- 1. The Ld.CIT(A) has erred in law and on facts in deleting the addition of ₹ 8,00,000/- made u/s.68 of the Act and ₹ 41,900/- being interest paid thereon. 2. The Ld CIT(A) has erred in law and on facts in deleting the disallowance of shop rent & .....

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Act ) was framed vide order dated 28/12/2010, thereby the Assessing Officer (AO in short) made addition on account of unsecured loan and interest paid thereon amounting to ₹ 8 lacs and ₹ 41,900/- respectively. The AO has also made disallowance of shop rent and godown rent of ₹ 1,14,600/- and ₹ 78,000/- respectively. Further, the AO made addition on account of unexplained investment u/s.69 of the Act of ₹ 4,83,019/-. The AO also made disallowance of depreciation on s .....

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ition made on account of unexplained cash credit of ₹ 8 lacs and interest thereon of ₹ 41,900/-. The ld.CIT(A) also deleted the addition of ₹ 1,14,600/- and ₹ 78,000/- made on account of shop and godown rent. However, the ld.CIT(A) confirmed the disallowance of depreciation to the extent of ₹ 95,219/- and deleted the rest of the disallowance of ₹ 1,53,290/-. The ld.CIT(A) confirmed the addition of ₹ 3,86,269/- (Rs.4,83,019 - ₹ 96,750/-) in respect .....

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3. So far as ground No.1 of Revenue s appeal is concerned, the ld.Sr.DR vehemently argued that the ld.CIT(A) was not justified in deleting the additions. He submitted that the AO noted that the assessee has received loans from Shri Vijay Manibhai Patel a sum of ₹ 5,00,000/- and from Shri Vithalbhai D.Patel a sum of ₹ 3,00,000/- also paid interest of ₹ 41,900/- to Shri Vithalbhai D.Patel. He submitted that the AO has observed that the assessee did not file requisite details to .....

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iven loans. He drew our attention towards evidences furnished in the paperbook containing page Nos.1 to 172. The ld.counsel for the assessee placed reliance on the decision of Tribunal (ITAT A Bench Ahmedabad)[Third Member] in the case of ITO vs. Badiani Enterprises reported at (1985) 11 ITD 132 (Ahd.)(TM) and the judgement of Hon ble High Court of Gujarat in the case of CIT vs. Ayachi Chandrashekhar Narsangji reported at (2014) 42 taxman.com 251 (Guj.). 4. We have heard the rival submissions, p .....

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s not said to be legally correct on account of the following reasons: (i) The appellant had established all the three ingredients necessary for explaining the genuineness of the cash credits. The appellant had thus discharged the primary onus casted upon him as per the provisions of section 68 of the Act as under: (a) The identity of the depositors stands established by the affidavit, land records and the copies of bank accounts. (b) The genuineness of the transactions was also established from .....

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of their bank accounts were also furnished. (ii) The Assessing Officer had not collected any adverse material which necessiated for producing the creditors. (iii) The cash credits cannot be considered as unexplained only on account of non-production of creditors. The Hon'ble Gujarat High-Court in the case of Dy.CIT vs. Rohini Builders [2003] 256 ITR 360 (Guj.) had even held that merely because summons issued to some of creditors could not be served or they failed to appear before Assessing .....

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he case of Dimco Silk Mills vs. ITO 107 Taxman 41 (Ahd.). (v) The Hon ble Gujarat High Court as well as the other High Courts had held that the assessee can be asked to prove the source of creditor. It is not the obligation of the assessee to prove the source of source in the explanation about such credit with the assessee. 4.1. We have given our thoughtful consideration to the finding of ld.CIT(A). There is no dispute with regard to the fact that the identity of the depositors is not doubted. T .....

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arding shop rent & godown rent is concerned, the ld.Sr.DR placed heavy reliance on the assessment order and submitted that the ld.CIT(A) was not justified in deleting the disallowance. 5.1. On the contrary, ld.counsel for the assessee submitted that the relevant evidences were placed before the AO to prove that the assessee has paid rent for shop and godown and he also drew our attention towards paper-book submitted by the assessee. 6. We have heard the rival submissions, perused the materia .....

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or confirmation of the parties were furnished to whom these payments of rent were made. The books of account of the appellant were audited. The shops and godown were not taken on rent during the year under consideration but the same were taken on rent in A.Y. 2003-04. No such disallowance were made in earlier year. The Ld. Counsel has furnished sufficient evidence for the tenancy of the shop and godown. Such evidences were also independently filed before the Assessing Officer during remand proc .....

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