TMI Blog2015 (6) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the Assessee has no objection in this regard, we restore this issue to the file of A.O. for deciding the same afresh, after verifying the stand of the assessee in the light of decision of the Tribunal in the case of Vipin B. Mehta (2011 (5) TMI 503 - ITAT MUMBAI ).- Decided in favour of assessee for statistical purposes. Additions made under income from other sources - In the absence of any interest charged by the assessee on the loans and advances allegedly given for non-business purposes, interest attributable to such advances was added to the total income of the assessee as income from other sources - Held that:- Assessee has invited our attention to the details of such loans and advances as well as the details of interest received to point out that interest on loans given to G.Com Systems amounting to ₹ 9,24,273, L C. Ranka HUF amounting to ₹ 3,65,537, Vinod Ranka amounting to ₹ 11,50,414 and Bhanusa.com amounting to ₹ 11,73,192 was duly charged by the assessee and the same was also offered to tax as income. As regards the remaining loans and advances representing small amounts, he has submitted that the same were mainly given to the employees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : Mr. Ramakrishna Bandi ORDER Per P.M. Jagtap, A.M. This appeal filed by the assessee is directed against the order of Ld. CIT(A)-VI, Hyderabad dated 30.11.2010. 2. The assessee in the present case is an individual who is engaged in the business of trading in chemicals on wholesale basis in the name and style of his proprietary concern M/s. Gurudev Agency. The return of income for the year under consideration was filed by him on 25.10.2007 declaring total income of ₹ 3,13,080. In the assessment completed under section 143(3) vide order dated 30.11.2009, the total income of the assessee was computed by the A.O. at ₹ 25,61,415 after making the following additions. Sl.No. Particulars Amount in Rs. 1. Unexplained cash credits under section 68 of the Act 6,13,262 2. Disallowance of interest under section 40(a)(ia) 5,46,639 3. Income from other sources 5,91,619 4. Unexplained journal entries 2,54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s given by the assessee and that too in the earlier years and not in the year under consideration. He has contended that these amounts representing advances given thus cannot be added under section 68 of the Act. Although the learned D.R. has agreed in principle with this contention of the Learned Counsel for the Assessee, he has contended that this matter requires verification as the fact that the amounts in question represented advances given by the assessee was not specifically brought to the notice of the Assessing Officer by the assessee. Since the Learned Counsel for the Assessee also has no objection in this regard, we restore this issue to the file of the A.O. for deciding the same afresh, after verifying the stand of the assessee that the amount in question actually represented advances given by the assessee which cannot be added under section 68 of the Act as unexplained cash credits. Ground No.1 is accordingly treated as allowed for statistical purposes. 4. As regards the issue involved in Ground No.2 relating to the disallowance made by the A.O. and confirmed by the Ld. CIT(A) on account of interest under section 40(a)(ia), Learned Counsel for the Assessee has submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the addition made on account of interest attributable to the said advances is not sustainable. 6. Learned D.R. on the other hand has submitted that the explanation now offered by the Learned Counsel for the Assessee being offered for the first time before the Tribunal and since the same was not specifically putforth before the authorities below, an opportunity may be given to the A.O. to verify the same. We find merit in the contention of the learned D.R. and since the Learned Counsel for the Assessee also has no objection in this regard, we restore this issue to the file of the A.O. for deciding the same afresh, after verifying the explanation of the assessee offered before the Tribunal. Ground No.3 is accordingly treated as allowed for statistical purposes. 7. As regards the issue involved in ground No.4 relating to the addition made by the A.O. and confirmed by the Ld. CIT(A) on account of journal entries, it is observed that the amounts receivable from the various parties amounting to ₹ 2,54,729 were squared off by the assessee by transferring the balances in the said accounts to one creditor namely Rajesh Chemical Company by way of journal entry. Since the expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, restricted the disallowance of ₹ 2,72,517 made by the A.O. on this issue to ₹ 2,17,185. 10. At the time of hearing before us, Learned Counsel for the Assessee has submitted that the books of account regularly maintained by the assessee were duly produced before the A.O. for verification along with supporting bills and vouchers. He has contended that not a single instance, however, was pointed out by the A.O. of any unverifiable element involved in the expenses claimed by the assessee which were duly supported by the relevant bills or vouchers. However, as rightly contended by the learned D.R., the nature of expenses claimed by the assessee such as conveyance, petrol, entertainment, telephone etc., is such that the involvement of personal element in the expenses claimed by the assessee cannot be ruled out and some disallowance out of the said expenses for such personal element can justifiably be made. Having regard to all the facts and circumstances of the case, we are of the view that it would be fair and reasonable to disallow the expenses claimed by the assessee to the extent of ₹ 50,000 on account of involvement of personal element. We, accordingly, m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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