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2015 (10) TMI 1711 - ITAT MUMBAI

2015 (10) TMI 1711 - ITAT MUMBAI - TMI - Unexplained credit - addition u/s 68 - Held that:- Against the above addition the assessee approached to CIT(A) and filed additional evidence under Rule 46A on the plea that sufficient opportunity was not given by the AO insofar as documents were required by the AO at the fag end of the proceedings. We found that assessee was prevented by sufficient case for producing evidence. We also found that some of the documents were submitted during the assessment .....

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he assessee is also at liberty to furnish documentary evidence to substantiate its claim. The AO is to decide the entire issue afresh. - Decided in favour of assessee for statistical purposes.

Disallowance of expenditure - CIT(A) restricted disallowance to 15% - Held that:- In view of the findings recorded by CIT(A) for sustaining disallowance of 15% which has not been controverted by ld. AR by bringing any positive material on record, we confirm the action of the CIT(A) for disallowi .....

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on of ₹ 1,25,78,912/- out of ₹ 1,27,78,912/- addition made by A.O. 1. The learned CIT(A) erred in upholding the addition of ₹ 1,25,78,912/- [out of ₹ 1,27,78,912/- made by A.O.] made by A.O. u/s. 68 0 the Act as unexplained credit without appreciating that the same was the balance in account titled "inter branch and other adjustment Alc." which are primarily in the nature of reconciliation entries between Proprietor account and personal Individual account also m .....

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r to assert that the amount of ₹ 1.27 crores is genuine, are made at the end of the F.Y." the aforesaid finding is factually incorrect as the origin of most of the entries relates to earlier years and fully accounted for in the relevant years, only the adjustment entries were made" during the year to reflect the correct state of affairs, thus the same cannot be characterized as unaccounted receipts. II. Ad-hoc disallowance of expenses @ 15% of ₹ 12,89,606/- i.e. ₹ 3,2 .....

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ainst which assessee is in further appeal before us. 3. With regard to addition of ₹ 1,25,78,912/- in the inter branch account, the contention of ld. AR was that the credit entries in the account of inter branch and other adjustment account were primarily in the nature of reconciliation entries between proprietor account and personal individual account and that most of entries originated in the earlier assessment years. 4. Our attention was also invited to the computation of income to indi .....

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ne branch to another branch of the assessee. 5. We have considered rival contentions and found that during the scrutiny proceedings, the A.O. observed that the assessee had shown a gross loss on trading but had debited expenses to the tune of ₹ 17,99,513/- under various heads to the P&L Account for the year under consideration. Expenses under various heads amounting in all to ₹ 12,89,606/- were disallowed by the A.O., who noted that the manufacturing activity had closed down and .....

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essee transferred Flat No. 34, B Wing, Phase Il, Green Field Complex, Jogeshwari to Mr. VenkatSunderajan and Mrs. Lakshmi Venkatraman for a consideration of ₹ 51,50,000/-. The assessee has sought to match this with the ledger account of one S.Venkataraman which bears the credit entry of the corresponding amount and has stated that the book entry relating to sale was put into the "Inter-Branch Adjustment Account." It is further stated that the A.O. had accepted the long-term capit .....

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7; 18,26,316/- as loan transferred to the capital account of the assessee. A confirmation is filed stating that S. Venkat Sunderajan, younger brother of T.S. Natarajan, has an outstanding balance of ₹ 18,26,316/- with the assessee as on 31.3.2009. However, the AO observed that confirmation does not substantiate the date, mode and source of the said transaction. In view of these facts, the amount was ₹ 18,26,316/- was held to be un-explained cash credit of the assessee and the additio .....

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s 54 was subsequently claimed for the said flat. 9. Our attention was also invited to the amount of ₹ 35,56,602/, as being on account of difference in the opening balance of the capital account. In support of his claim the assessee has produced a copy of the audited balance sheet as on 31.03.2008 which reflects a negative capital balance of ₹ 29,64,629/-. As per ld. AR the negative capital balance as on 31.03.2009 was ₹ 65,21,231/- and that this was on account of calculation er .....

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of ₹ 2,00,000/- has been furnished during assessment proceedings and was also part of the material forwarded to the A.O. during remand proceedings. 11. The A.O. also noted that the capital account of the assessee in the proprietary firm reflected an 'inter-branch transfer credit' of ₹ 127.79lakhs. The explanation given by the assessee, that the credit was on account of inter-branch transactions and that the inter - branch balances remained unreconciled since 1984 was found i .....

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