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Commissioner of Income Tax-I, Amritsar Versus M/s The International Engg. Corporation (R)

2015 (10) TMI 83 - PUNJAB & HARYANA HIGH COURT

Addition made under Section 41(1) - failure to produce any explanation/documentary evidence during the course of assessment proceedings and as well as before Ist appellate authority - ITAT deleted the addition - Held that:- It has been categorically recorded by the Tribunal that the assessee had submitted the copies of accounts and complete postal addresses of all the parties on record which had not been held to be false or fraudulent by the Assessing Officer and therefore, the assessment had to .....

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and the AO has not collected any adverse material. The assessee having proved the identity, capacity and creditworthiness of said persons and therefore cannot be subject matter of addition. Thus addition deleted - Decided in favour of assessee. - ITA No. 170 of 2013 - Dated:- 11-8-2015 - Ajay Kumar Mittal And Ramendra Jain, JJ. For the Appellant : Mr. Dinesh Goyal, Adv For the Respondent : Mr. Pankaj Jain, Sr. Adv. with Mr. Divya Suri, Adv., Mr. Deepanshu Jain, Adv. and Mr. Madhur Sharma, Adv JU .....

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ade under Section 41(1) of the Income Tax Act, 1961 when the assessee failed to produce any explanation/documentary evidence during the course of assessment proceedings and as well as before Ist appellate authority? ii)Whether on the facts and circumstances of the case, the Hon'ble ITAT Amritsar Bench is right in law in deleting the addition of ₹ 26,30,038/- made by Assessing Officer on account of unexplained cash credit/unsecured loans and confirmed by learned CIT(A) Amritsar as the a .....

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nfirmation of copies of accounts, books of accounts, for which his books of accounts have already been rejected under section 145(3) of the Act? iv)Whether in the facts and circumstances of the case, the finding of Hon'ble ITAT under para No.11 of the judgment to the effect that the amount of ₹ 26,30,038/- is outstanding for the last many years as per the acknowledgment of return and PAN of concerned persons and proved their identity, capacity and creditworthiness, is perverse being co .....

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m is engaged in the business of manufacturing of textile machinery. It filed its return of income on 29.10.2007 at ₹ 44,000/- for the assessment year 2007- 08 and the same was processed under Section 143(1) of the Act. Subsequently, the case was selected for scrutiny as per CBDT's instructions and guidelines. The Assessing Officer completed the assessment under Section 143(3) of the Act on 16.12.2009, Annexure A.1 and while rejecting the books of account of the assessee under Section 1 .....

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vidence at the appellate stage. The assessee went in appeal before the Tribunal. Vide order dated 15.2.2013, Annexure A.3, the Tribunal partly allowed the appeal holding that the assessee having proved the identity, capacity and credit worthiness of the said persons, deleted the additions of ₹ 14,74,763/- and ₹ 26,30,038/-. Hence the instant appeal by the revenue. 3. We have heard learned counsel for the parties. 4. Learned counsel for the revenue submitted that the Tribunal erred in .....

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on that basis. The relevant findings recorded by the Tribunal in its order dated 15.2.2013, Annexure A.3 read thus:- "10. We have heard the rival contentions and perused the facts of the case. There is no dispute to the fact that the assessee has not submitted confirmation of copies of accounts, books of account and therefore, the arguments made by the learned DR and the findings of both the authorities below to that extent are not disputed but at the same time, there is also no dispute tha .....

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and were available before both the authorities below. The said balances are outstanding in the following years as well is a matter of record and there is no dispute to the said fact. The assessee has not obtained any benefit out of such liability which is not ceased to be liability and the assessee has not written back such liability unilaterally in its books of account. Therefore, such liability cannot be a subject matter of section 41(1) of the Act. It is also a matter of record in the order .....

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he learned counsel and was not rebutted by the learned DR in this respect. Even if confirmation copies of accounts and books of account are not produced, the copies of audited accounts for the impugned year and the assessment record of preceding year was available with the AO. The AO cannot make the assessment on conjectures, surmises or on the basis of suspicion. The AO has not given any findings that the said copies of account as false or fraudulent. Therefore, the assessment has to be made on .....

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