TMI Blog2011 (3) TMI 1639X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of interest on cash credit of ₹ 7,81,665/- (3) On the facts and circumstances of the case in law, the ld. CIT(A) has erred in deleting the addition made on account of Diwali expenses of ₹ 25,000/-. (4) On the facts and circumstances of the case in law, the ld. CIT(A) has erred in deleting the addition made on account of office expenses of ₹ 26,585/-. 2. The first issue in dispute is regarding addition of ₹ 64,81,500/- being the sum added u/s 68. During the course of assessment proceedings the AO found that there was unsecured loans in the names of 43 persons amounting to ₹ 64,81,500/-. The details of the names and amount standing against them are given by the AO in para 3 of his order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... editors just for the sake of formalities. Their business income was insignificant and their household withdrawals were insufficient. They did not have capacity to give loan to the assessee. On this basis the AO proceeded to treat the sum of ₹ 64,81,500/- as unexplained cash credit. 3. Before ld. CIT(A) the assessee emphasized the point that details of PAN, copies of confirmation letters, copies of acknowledgments of returns filed, copies of computation of income, profit and loss account, capital account and balance sheets were filed before the AO. Thus identity of creditors and their creditworthiness is proved and once money is transferred through banking channels it should be treated as genuine. Reliance was placed on the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Against this, the ld. DR submitted that it is the duty of the assessee to comply with the requirement made by the AO when he asked the assessee to produce the creditors. Once assessee fails to comply with the AO s requirements it cannot be said that assessee has discharged the onus. He referred to the authorities cited by the AO in his order. 5. On the other hand, the ld. AR submitted that once initial burden is discharged by the assessee, no further onus is lay on him. Once the assessee repaid the money to the creditors he has no control over the creditors and he could not persuade them to appear before the AO. The AO ought to have exercised his powers under the IT Act and enforce the attendance of the creditors, or carried out enquiri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and evidence that all of them are income-tax assessees then it cannot be said that assessee has still to discharge the onus. The only ground on which the AO made the addition was that assessee failed to produce the creditors. As observed above by us there is a reasonable cause for the assessee for not being able to do so. Third Member in Kalyan Memorial and Charitable Trust vs. ACIT (2009) 121 ITD 525(Agra) has held that when particulars regarding income-tax assessment and bank account had been filed in respect of the creditors initial burden on the assessee u/s 68 is held discharged and shifts to the Revenue to show that what was stated or explained by the assessee was not satisfactory. Similar view was taken by Hon. Delhi High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent was made in the month of October, 2004 through cheque. The AO did not verify whether the payment was actually debited in the bank account in the month of October. Since this verification is done by ld. CIT(A) we decline to interfere. 10. The other item relates to disallowance of 25% out of office expenses. The Total claim was ₹ 1,06,340/-. The AO disallowed by estimate. The ld. CIT(A) allowed the claim by holding that these expenses comprises of items of petty nature such as tea, coffee and minor maintenance for which proper bills were issued and vouchers kept by the assessee. They were considered necessary for day to day running of the office. Accordingly he allowed the claim. 11. We have heard the parties and carefully per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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