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2016 (2) TMI 87 - ITAT MUMBAI

2016 (2) TMI 87 - ITAT MUMBAI - TMI - Addition being 20% of labour charges - CIT(A) deleted the addition - Held that:- We find that the payments of labour charges were made to three parties as submitted by the Ld. AR of the assessee after deduction of TDS which were also verified by the Ld. CIT(A), and he gave specific findings to this effect in the appeal order. The payments of these labour and processing charges were made by account payee cheques. We also note that the assessee furnished the c .....

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nd also the return of TDS were filed and, therefore, we uphold the order of CIT(A) on this point by dismissing the appeal of the revenue on this point. - Decided against revenue

Addition on account of sundry creditors - CIT(A) deleted the addition - Held that:- We find that the AO added the entire amount of Sundry Creditors on the ground that the assessee did not furnish the names and addresses of the Sundry Creditors and, therefore, the necessary verification could not be carried out .....

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e facts of the case and on the basis of records and arguments of the ld. Counsel, we find that the AO made an addition without examining the details and information available before him and made the addition without application of mind to the facts and information before him. We do not find any infirmity in the order of CIT(A) on this point and uphold the same by dismissing the appeal of the revenue. - Decided against revenue

Addition u/s.68 as unexplained cash credits for unsecured l .....

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ken in the earlier years. In our considered view the provisions of section 68 of the Act cannot be invoked the loans were taken in the earlier years and therefore, the CIT(A) was justified in deleting the addition made by the AO u/s 68. The interest on unsecured loan was paid at the rate of 12% which is very reasonable and therefore, the CIT(A) had rightly deleted the addition on that point. - Decided against revenue - ITA NO 7530/Mum/2013 - Dated:- 6-1-2016 - SHRI AMIT SHUKLA, JUDICIAL MEMBER A .....

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30,12,975/- out of labour charges without appreciating the reasons of disallowance given by the AO. 2. The Ld. CIT(A) erred in deleting the addition made by the AO on account of sundry creditors balance of ₹ 17,17,247/- stating that the Appellant By Shri Naveen Gupta Respondent By Shri Paresh Shaparia Date of hearing 03.09.2015 Date of pronouncement 06.01.2016 AO s conclusion was simply based on partial appreciation of the facts of the case without appreciating the full facts given by the .....

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tted as audit report. 2. Ground no. 1 relates to deletion of addition of ₹ 6,02,995/- being 20% of labour charges of ₹ 30,12,975/-. 2.1. Brief facts of the case are that the assessee filed its return of income on 30.09.2009 declaring total income of ₹ 43,79,734/-. The assessee firm is engaged in the manufacturing of P.P Caps. During the course of scrutiny proceedings, the AO noticed that the assessee had charged to the profit and loss account ₹ 30,12,975/- under the head .....

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. CIT(A) also observed that the AO did not make any enquiry regarding genuineness of the payments. The CIT(A) recorded the findings that the payments were made to 4 parties after deduction of TDS and the quarterly returns were also filed and thus the assessee produced all the relevant record from which the verification could have been made by the AO. 2.2 The Ld. DR submitted that the CIT(A) had erred in deleting the disallowance of ₹ 6,02,595/- being 20% of the total labour and processing .....

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TDS were also filed. All these payments were made by cheques and, therefore, the AO had grossly erred in making disallowance on adhoc basis without giving any findings for doing so and prayed that the order of CIT(A) deleting the said additions/disallowance deserved to be affirmed. The AO is directed accordingly. 2.3. We have considered the rival submissions and perused the relevant material on record. We find that the payments of labour charges were made to three parties as submitted by the Ld .....

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ould not be possible is wrong and contrary to the facts on records. In our opinion adhoc disallowance cannot be sustained as it was not supported by the AO with specific reason/defects in the Books of Account where the payments were made by accounts payee cheques after deduction of TDS and also the return of TDS were filed and, therefore, we uphold the order of CIT(A) on this point by dismissing the appeal of the revenue on this point. The AO is directed accordingly. 3. Ground no. 2 relates to d .....

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s and supporting bills of these creditors to the income of the assesse and, therefore, the necessary enquiry u/s 133(6) or summon u/s 131 could not be issued. The CIT(A) deleted the addition of ₹ 17,17,247/- by observing that the basis of AO to add sundry creditor was incorrect and AO failed to consider the submissions of the assessee filed during the assessment proceedings vide letter dated 16.11.2011 which was also acknowledged by the AO and referred in the Assessment Order wherein the a .....

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editors for the AY 2003-04 and their confirmations. 3.1 The ld. DR relied upon the order of AO and submitted that the additions were rightly made by the AO on account of Sundry Creditors. Assessee did not furnish the necessary details with the AO following which necessary verification could not be carried out. The ld. AR, on the other hand, that the assesee submitted all the necessary information required by AO vide letter dated 16.11.2011 which was referred to by the AO in the assessment order. .....

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submissions and perused the material on record. We find that the AO added the entire amount of Sundry Creditors of ₹ 17,17,244/-on the ground that the assessee did not furnish the names and addresses of the Sundry Creditors and, therefore, the necessary verification could not be carried out. However, the ld. CIT(A) observed the necessary details, had been filed by the assessee vide letter dated 16.11.2011 in paragraph 4 & 5 whereby the party- wise sundry creditors and also the details .....

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addition without application of mind to the facts and information before him. We do not find any infirmity in the order of CIT(A) on this point and uphold the same by dismissing the appeal of the revenue. The AO is directed accordingly. 4. The ground number 3 &4 relates to deleting the addition u/s.68 of the Act as unexplained cash credits for unsecured loans of ₹ 22,70,086/- and interest paid on unsecured loan of ₹ 2,84,304/-. The brief facts are that the assessee borrowed ͅ .....

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overed u/s 40A(2)(b). The ld.CIT(A) deleted the disallowance by observing in paragraph no. 7.3 - page no. 13 of the CIT(A) order that all the sundry creditors and loans related to earlier year, and only interest on these loans were provided for relating to the current year after deduction of applicable TDS. The ld. CIT(A) further observed that all these information were available before the AO in the Tax Audit Report forming part of 3 CD which was part of return of income of the assessee. The ld .....

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tored. The ld. AR on the other hand submitted with all the details regarding unsecured loans were on records available before the AO in the Tax Audit Report which was part of the Income Tax Return of the assessee, the said report contained the detailed information as to opening balance, amount borrowed during the year, repaid during the year and maximum amount was outstanding at the year end. The ld. Counsel further submitted that the addition u/s 68 of the Act could only be made if any sum was .....

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