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Shri J. Kanagarajan Versus The Assistant Commissioner of Income Tax, Circle I, Thanjavur.

2016 (1) TMI 710 - ITAT CHENNAI

Disallowance of outstanding liability - Held that:- the assessee has not able to file confirmation letters from the 24 trade creditors. Since the trade liability was not proved by filing the confirmation letters from the trade creditors, we find that the Assessing Officer has judiciously disallowed the above amount and the ld. CIT(A) has rightly confirmed the above disallowance. Therefore, we find no infirmity in the order passed by the ld. CIT(A) on this issue. - Decided against assessee
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e, considering the nature of the business, we are of the firm view that the Assessing Officer was not justified in making disallowance on estimated basis in the present case. Accordingly, the disallowance made by the Assessing Officer is deleted. - Decided against revenue

Disallowance towards advertisement and payment for festivals, etc. - Held that:- As in the absence of original cash bills and the assessee has produced self made vouchers, after considering nature of the claim, the A .....

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ated 15.04.2015 for the assessment year 2006-07. 2. Brief facts of the case are that the assessee is an individual, engaged in the business of trading in paddy and hiring of lorries, dealer in Petrol & diesel, transport contract, etc. and filed his return admitting total income of ₹.9,15,442/- along with agricultural income of ₹. 25,000/-. The return was processed under section 143(1) of the Income Tax Act, 1961 [ Act in short] and selected for scrutiny. In response to notice iss .....

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e assessee is in appeal before the Tribunal by raising various grounds. 3. The first ground raised in the appeal of the assessee is with regard to addition of ₹.9,80,850/- towards trade creditors. On verification of the balance sheet, the Assessing Officer has found that there is a liability of ₹.49,09,487/- shown under Mirasudar account representing the creditors for purchase of paddy. As per the details furnished by the assessee before the Assessing Officer, a sum of ₹.28,67, .....

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ssessing Officer added the same to the total income of the assessee. 4. On appeal, the ld. CIT(A), after considering the submissions of the assessee as well as materials on record, confirmed the disallowance made by the Assessing Officer since the assessee was not able to file confirmation letters from the 24 trade creditors even before the ld. CIT(A). 5. Before us, the ld. Counsel for the assessee has submitted that it is a trade practice of paying the sale proceeds to big land lords (Mirasudar .....

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anding for more than a year. The assessee was asked to furnished confirmation letters in respect of the outstanding amounts. Out of 59 persons against whom the above amount is shown as outstanding, the assessee has filed confirmation letters from 35 creditors. However, the assessee could not file confirmation letters from 24 creditors. Since the outstanding liability to the extent of ₹.9,80,850/- was not proved by filing confirmation letters, the Assessing Officer disallowed the same. On a .....

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the ld. CIT(A) has rightly confirmed the above disallowance. Therefore, we find no infirmity in the order passed by the ld. CIT(A) on this issue. Accordingly, the ground raised by the assessee is dismissed. 8. The next issue raised in the grounds of appeal of the assessee is with regard to confirmation of outstanding credits in the name of Shri C. Subramanian of ₹.56,000/- [in ground No. 3.1] and in the name of Shri A. Selvam of ₹.26,000/- [in ground No. 3.2]. At the time of hearing .....

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oss of ₹.8,46,680/- from lorry business. The assessee has debited lorry maintenance expenses of ₹.7,79,841/-, car expenses of ₹.1,07,787/- and financial charges paid to SFL of ₹.1,50,002/-. The assessee has credited hire income of ₹.15,43,700/-. The Assessing Officer has observed that most of the expenditures claimed by the assessee are based on the payment slips given by the drivers except for the bills of diesel purchases, all other expenses claimed are through se .....

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the disallowance made by the Assessing Officer. 12. On the other hand, the ld. DR relied on the orders of authorities below. 13. We have heard both sides, perused the materials on record. The Assessing Officer has observed that most of the expenditures claimed by the assessee are based on the payment slips given by the drivers except for the bills of diesel purchases, all other expenses claimed are through self made vouchers only. Since the assessee has produced self made vouchers and element o .....

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