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2016 (3) TMI 494 - ITAT AHMEDABAD

2016 (3) TMI 494 - ITAT AHMEDABAD - TMI - Disallowance on account of sundry creditors - Held that:- No further transaction on account of internal dispute and settlement of claim of the party, the very same amount is appearing in the party's ledger account as closing credit balance as on 31/03/2011. Thus, this being an old account showing opening credit balance in the previous year and there being no other transaction, the same old balance as on 31/03/2011 is carried forward as on 01/04/2011 in t .....

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he Act, so there was no justification of making impugned addition on account of old credit balance of the creditor concerned for the year under consideration. CIT(A) was not justified in upholding the impugned addition made by the Assessing Officer - Decided in favour of assessee

Disallowance on account of interest - Held that:- In the present case, the assessee has paid interest only to three parties as stated above. The same is not on account of any sharafi borrowing but it is a tra .....

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l facts and circumstances of the case and submissions of the ld. Authorized Representative, deem it proper to set aside the order of the CIT(A) on this issue and restore this matter back to the file of the CIT(A) for deciding this issue afresh in the light of aforesaid submissions of the ld. Authorized Representative.- Decided in favour of assessee for statistical purposes. - ITA No. 3262/Ahd/2015 - Dated:- 3-2-2016 - SHRI SHAILENDRA K. YADAV, JUDICIAL MEMBER For The Assessee : Shri Anil Kshatri .....

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ors, when there is no justification for making impugned disallowance. The same deserves to be deleted. 2. On the facts and law as well as in the circumstances of the case of the appellant, the Ld. CIT(Appeals) has grossly erred in confirming disallowance of ₹ 83,673/- on account of interest, when there is no justification for making impugned disallowance. The same deserves to be deleted. 3. The first issue is with regard to the disallowance of ₹ 3,22,037/- on account of sundry credit .....

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ee. The name of the above party namely M/s United Liner Agency India Pvt. Ltd. appears under the head 'Sundry Creditors' in the assessee's balance sheet as on 31/03/2011. Complete detail of sundry creditors was provided in detailed group summery of Schedule- 2. As per copies of ledger account filed on record, the assessee has credited a sum of ₹ 3,22,037/- as detention charges to the account of the aforesaid party on 01.02.2007. The said balance outstanding as on 31.03.2007 has .....

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on 11.04.2011 in the books of account of the assessee. Thus, there was no new credit/liability of the assessee in the previous year relevant to Assessment Year 2011-12. Therefore, as per the normal provisions of the Act there is no justification for making impugned addition on account of old credit balance of the creditor for the year under consideration. During the course of appellate proceedings, the assessee submitted a written submission dated 28.05.2015. According to Authorized Representat .....

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of assessee. Thus, there is no credit/liability of the assessee in the previous year relevant to A.Y.2011-12." Whereas, in page No.6 of appellate order, the CIT(A) came to the conclusion that no evidence whatsoever has been produced before him by the assessee in support of the claim made. In this regard the stand of the assessee has been that he has submitted a paper book duly indexed containing total 89 pages and has categorically submitted that in the normal provisions of the Act, so ther .....

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77; 83,673/- on account of interest. The Assessing Officer has made addition of ₹ 83,673/- by disallowing entire interest expenses debited to the Profit & Loss Account. The Assessing Officer noticed that there was a debit balance of ₹ 2 lakh in the name of M/s. Sukun Business. He further noted that no interest was disclosed in the P&L Account, whereas the assessee had debited interest of expense of ₹ 83,673/- in the Profit & Loss Account. Therefore, he disallowed th .....

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e parties was claimed to be genuine and incurred during the course of business and there was no element of borrowing money for nonbusiness purposes. The assessee has deducted tax at source attributed to the interest credited to their ledger accounts. Therefore, the ld. Authorized Representative for the assessee submitted that the Assessing Officer was not justified in disallowing the entire claim of interest expense of ₹ 83,673/-, without appreciating the facts of the case in proper perspe .....

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tion. He further submitted that, as per P& L a/c, the assessee has already credited an amount of ₹ 79,637/- as interest income, therefore, the Assessing Officer's assumption of non-charging of interest on loans & advances was not correct. The interest expenses were on account of interest attributable to delayed payments for purchase of goods and packing material; and no personal element was involved and the same was claimed which is deductable u/s.36(l)(iii) of the Act. Without .....

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