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2015 (12) TMI 762

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..... e, was on account of difference in the years, in which some credit notes were accounted for by both the sides. Thus the addition made by the AO on this issue was not sustainable and the ld. CIT(A) is not justified to confirm the same without appreciating the reconciliation statement filed by the assessee explaining the difference in the amount of credit notes - Decided in favour of assessee. Disallowance on account of interest on unsecured loan under section 40(a)(ia) - non-deduction of tax at source - said disallowance was made by the AO due to failure of the assessee to file during the course of assessment proceedings form no.15G claimed to be issued by Shri S. Debnath, the recipient of the interest - Held that:- Before the ld. CIT(A), the assessee however filed a photo copy of relevant form no.15G with a stamp thereon acknowledging receipt thereof by the concerned authority. The ld. CIT(A) however did not admit this relevant evidence on the ground that a photo copy of form no.15G was filed by the assessee and not the original. Unable to subscribe to the view taken by the ld. CIT(A) on this issue. At the time of hearing, the ld. Counsel for the assessee has filed a photo copy .....

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..... m the said party. It was further noticed by the AO that the assessee in his books of accounts however had accounted for the credit notes only of the value of ₹ 16,46,019/-. He, therefore required the assessee to explain the difference of ₹ 2,07,306/-. In reply, a reconciliation statement was prepared and furnished by the assessee explaining the said difference. According to AO, the said explanation however was not verifiable in the absence of supporting documentary evidence. He, therefore, treated the difference of ₹ 2,07,306/- as undisclosed income of the assessee and added the same to his total income. During the course of assessment proceedings, it was also noticed by the AO that no tax at source was deducted by the assessee from the interest of ₹ 1,08,000/- paid on the unsecured loan taken from one Shri S. Debnath. In this regard, explanation offered by the assessee that Shri S. Debnath has given form no.15G for non-deduction of tax was not accepted by the AO in the absence of copy of such form filed by the assessee. Accordingly, he invoked the provisions of section 40(a)(ia) and disallowed interest of ₹ 1,08,000/-. The withdrawal shown by the asse .....

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..... his position was clearly pointed out by the assessee in the counter-comments offered before the ld. CIT(A) on the remand report of the AO, the ld. CIT(A) still proceeded to confirm the addition of ₹ 2,07,306/- made on account of difference in the amount of credit notes observing that there was no documentary evidence filed by the assessee in the form of claim made or confirmation from the company to support and substantiate the explanation offered in the reconciliation statement . Before the ld. CIT(A), a copy of form no.15G issued by Shri S. Debnath duly acknowledged by the concerned I.T. authority was also filed by the assessee. When the said copy was forwarded by the ld. CIT(A) to the AO, the latter did not make any adverse comments thereon except stating that the same was not produced by the assessee during the course of assessment proceedings inspite of sufficient opportunity afforded to him. The ld. CIT(A), however did not find the photo copy of form 15G filed by the assessee as admissible evidence as the same was only a photo copy and there was no original copy filed by the assessee. Accordingly, he confirmed the disallowance made by the AO under section 40(a)(ia) on a .....

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..... .2 relating to the addition of ₹ 2,07,306/- made by the AO and confirmed by the ld. CIT(A) on account of difference in the amount of credit notes, it is observed that a reconciliation statement was furnished by the assessee before the ld. CIT(A) explaining the said difference. When the said reconciliation was forwarded by the ld. CIT(A) to the AO, the latter did not make any adverse comments thereon and although this position was specifically pointed out by the assessee, the ld. CIT(A) still confirmed the addition made by the AO on this issue observing that there was no documentary evidence filed by the assessee in order to enable verification of the reconciliation statement as pointed out by the AO. At the time of hearing before us, the ld. Counsel for the assessee has taken us through the copy of remand report submitted by the AO to the ld. CIT(A) to show that there was no such adverse comment offered by the AO in his remand report regarding lack of any documentary evidence and the reconciliation statement furnished by the assessee was actually accepted by him. It is also seen from the reconciliation statement furnished by the assessee that the major difference, as explaine .....

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