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2015 (12) TMI 387 - ITAT BANGALORE

2015 (12) TMI 387 - ITAT BANGALORE - TMI - Addition for a claim of interest and salary dues - CIT(A) deleted the addition - Held that:- Assessee had clearly mentioned in its return of income that he was following mercantile system of accounting. A system of accounting followed by the assessee cannot be changed simply based on an oral statement. We are of the opinion, that once the books of accounts are maintained in mercantile system of accounting, claim of outstanding expenditure if its correct .....

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und correct. We do not find any reason to interfere with such direction - Decided against revenue

Additions made for unsecured loans - CIT(A) deleted the addition - Held that:- Assesese in his reply to a question raised during the course of his examination had stated that he was not having any confirmation from the loan creditors. The CIT(A) had given relief to the assessee with a finding that the Pan Nos. of the creditors were available and they were assessed by the very same AO. May .....

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remit the issue regarding the addition for unsecured loans back to the file of the AO for consideration afresh in accordance with law. - Decided in favour of assessee for statistical purposes.

Addition on deficit in source of drawings - CIT(A) deleted the addition - Held that:- The CIT(A), on appeal had considered the fact that assessee belonged to a group of individuals all of whom were assessed and located in Mandya. He held that an addition of ₹ 50,000/- would be fair, consi .....

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pt a claim of agricultural income. However, this argument can be considered only where the agricultural income claimed is of a higher order. It is admitted position that the holding of the assessee was at Sangli, which is a rich sugar belt area in Devanagar. Assessee had also given the details of the agricultural crops which are being raised by it. In such circumstances, on a preponderance of probability, the CIT(A) had allowed the claim. We do not find any reason to interfere with the order of .....

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dication. 2. Vide its ground no.1, grievance raised by the revenue is that CIT(A) deleted addition made by the AO for a claim of interest and salary dues. 3. Facts apropos are that the assessee a Pawn Broker had filed his return for the impugned assessment year declaring an income of ₹ 4,59,759/-. There was a survey u/s 133A of the IT Act, 1961 on 11- 02-2010 in the premises of the assessee. Assessee was carrying on the business of pawn broking along with his family members from the very s .....

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had in the sworn statement stated that he was following cash system of accounting. Therefore, as per the AO, outstanding expenses could not be claimed. Both the claims viz. interest as well as salary were disallowed. 4. Assessee moved in appeal before the CIT(A) and submitted that in the return filed for the impugned assessment year, it had declared the method of accounting as mercantile. Therefore, as per the assessee merely based on an oral statement the claim ought not have been disallowed. .....

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order dated 09-04-2015 in ITA No.1271 to 1273(B)/2014 at para-7 & 8 upheld the order of the learned CIT(A) deleting a similar disallowance. 7. We have perused the orders and heard the rival contentions. Assessee had clearly mentioned in its return of income that he was following mercantile system of accounting. A system of accounting followed by the assessee cannot be changed simply based on an oral statement. We are of the opinion, that once the books of accounts are maintained in mercanti .....

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w or reconcile the difference in capital. 9. Per contra, learned AR submitted that directions given by the CIT(A) was only to verify and thereafter allow the claim. According to him, no prejudice was caused to the revenue by such directions. 10. We have perused the order and heard the rival contentions. Learned CIT(A) had directed the AO to verify whether the opening balance as on 01-04-2008 was the same as the closing balance as on 31-03-2008. The direction was to verify the claim and allow it, .....

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ment given, assessee stated that he was not having confirmation from the above loan creditors. Accordingly, he made an addition of ₹ 23,18,590/-. In its appeal before the CIT(A), assessee argued that creditors were family members who were assessed by the very same AO. As per the assessee Pan Nos. of these creditors were also available. Hence, as per the assessee the additions were not justified. Learned CIT(A) was appreciative of these contentions. He deleted the additions. 12. Now before .....

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course of his examination had stated that he was not having any confirmation from the loan creditors. The CIT(A) had given relief to the assessee with a finding that the Pan Nos. of the creditors were available and they were assessed by the very same AO. May be this is true. However, there cannot be any dispute that it required a verification by the AO. Just because the creditors were assessed by the same AO, would not be a reason to say that assessee had no duty to furnish a confirmation letter .....

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