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2016 (5) TMI 317 - ITAT MUMBAI

2016 (5) TMI 317 - ITAT MUMBAI - TMI - Addition on account of alleged unexplained cash credits - Held that:- Bank statement of Hina Maganlal Andharia has also been produced and speaks about some transactions which is required to be verified in the interest of justice also. However, it is also recorded that the statement of Hina Maganlal Andharia has also been recorded at the time of assessment of the case which is also required to be viewed in accordance with law. Anyhow these transactions have .....

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erefore, we are of the view that the matter of controversy in this regard is also required to be re-examined by taking into account the above mentioned documents to decide the claim of the assessee in the interest of the justice therefore we restore this issue upon the file of Assessing Officer again to decide the matter afresh after giving an opportunity of being heard to the assessee in accordance with law - Decided in favour of assessee

Disallowance u/s. 14A - Held that:- As per th .....

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the appellant to his personal capital account and not to the business accounts. Therefore it is quite clear that no expenditure of any kind was occurred to get the exempt income therefore in these said circumstances no disallowance of expenses is required u/s. 14A read with Rule 8D of the Act - Decided in favour of assessee

Disallowance of office expenses - Held that:- Addition to the extent of 10% confirmed as relying on assessee’s own case for the A.Y.2010-11. - I.T.A. No.1545/M/14 .....

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emicals. The assessee has shown business income of ₹ 2,07,79,472/- from his proprietary concern, M/s. Perry Impex and Income from Other Sources of ₹ 2,22,501/-, Income from Speculation Business of ₹ 42,980/- and income from Short Term Capital Gains of ₹ 2,75,974/-. After claiming deduction u/s. 80C and 80D of ₹ 1,08,075/-, the assessee has shown net taxable income of ₹ 2,12,11,760/-. The assessee has also earned dividend income of ₹ 4,71,987/- and Long T .....

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plied the provision u/s.14A read with Rule 8D of the Income Tax Rules, 1962 in connection with the income which has been claimed as exempt challenged by the assessee which were confirmed by the learned CIT(A). 3. The assessee has raised the following ground of appeals:- A. Addition on account of alleged unexplained cash credits - ₹ 10,95,000/- 1) The learned Commissioner of Income Tax (Appeals) - 17, Mumbai [CIT(A)] erred on facts and in law in upholding the order of the Deputy Commissione .....

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ained cash credits of ₹ 10,95,000/- as made by the AO and confirmed by the CIT(A) is required to be deleted: a) Ms. Manchhagauri A. Andharia - ₹ 1,00,000/- b) Mr. Gopalji V. Variya HUF - ₹ 5,00,000/- c) Ms. D.S.Mehta - ₹ 4,95,000/- B. Disallowance u/s. 14A - ₹ 99,093/- 3) The learned CIT(A) having held that the appellant had not incurred any direct or indirect expenditure for earning the exempt income erred in confirming the disallowance u/s.14A to the extent of  .....

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nses as made by the AO and as confirmed by the CIT(A) may be deleted. D. Disallowance out of Conveyance Expenses - ₹ 3,676/- 7) The learned CIT(A) erred on facts and in law in upholding the order of the AO making a disallowance of ₹ 3,676/- out of Conveyance expenses. 8) The appellant prays that the disallowance of ₹ 3,676/- out of Conveyance Expenses as made by the AO and as confirmed by the CIT(A) may be deleted. E. Disallowance out of Misc. Expenses - ₹ 1,063/- 9) The .....

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penses. 12) The appellant prays that the disallowance of ₹ 3,910/- out of staff welfare expenses as made by the AO and as confirmed by the CIT(A) may be deleted. G. Disallowance out of Telephone expenses - ₹ 3,416/- 13) The learned CIT(A) erred on facts and in law in upholding the order of the AO making a disallowance of ₹ 3,416/- out of Telephone expenses. 14) The appellant prays that the disallowance of ₹ 3,416/- out of Telephone expenses as made by the AO and as confir .....

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nished sufficient documents before the learned CIT(A) and also proved the identity of the lenders and correct address and proved the genuineness of the claim which has not considered by the learned CIT(A) wrongly and illegally therefore the order of learned CIT(A) is wrong against law and facts and is liable to be set aside. However the learned Departmental Representative has refuted the said contention. The Assessing Officer has declined the loan taken from Manchhagauri M. Andharia, Gopaliji V. .....

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ate confirming that amount transferred from bank account of Ms. Hina M. Andharia s account to appellant s bank account 5. Form 15H 6. Income Tax Acknowledgement of Ms. Hina M. Andharia 7. Salary Certificate of Ms. Hina M. Andharia 8. Statement on Oath recorded by Commissioner of Income Tax(Appeals) - 17, Mumbai Ms.Darshana S. Mehta (Relation-Sister) 1. Confirmation 2. Copies of Bank Accounts/Statements 3. Copy of Post Office Savings account 4. Copy of Acknowledgement and Copy of Income Tax Retur .....

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. Manchhagauri M. Andharia which has been shown at page 221 to 222 of the paper book and statement of Ms. Hina M. Andharia which has been shown at page 222 and 223 of the paper book and Ms. Darshana Mehta which has been shown at page 223 of the paper book. Ms. Hina M. Andharia proved the transactions of her mother Ms. Manchhagauri M. Andharia. The remand report which has been attached at page 234 of the paper book speaks that the assessee was not entitled to adduce the evidence because the evide .....

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onal evidence but arrived at this conclusion that the lender were not having capacity to give the loan therefore the loan given by above said three person falls under section 68 of the Act. The relevant para of the finding of the learned CIT(A) is hereby reproduced as under: 1.3.8 As regards the identity of the persons who had given loan to the appellant there is no dispute. The creditworthiness of Mr. Gopalji V. Varaiya HUF who had given loan of ₹ 5 lakhs to the appellant required to be e .....

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roved automatically. The circumstantial evidences thus indicate that it is highly unbelievable that a person of such of lowly mean can advance sum of ₹ 5 lakh to the appellant. Further, it is also seen that Mr.Gopalji V. Varaiya HUF had given loan and advances standing in the name of various persons amounting to ₹ 16.90 lakhs. Therefore, under the circumstances the creditworthiness of Mr. Gopalji V. Varaiya HUF is not established and the transaction in this backdrop does not transpir .....

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d money to her mother Manchhagauri M. Andharia is also in doubt as the total income of Mrs. Hina Maganlal Andharia was ₹ 3,30,088/- and after making investment of approximately on lakh, her carry home salary is ₹ 2,20,000/- approximately which in any case is not sufficient to support a single family. It is therefore highly improbable that she had advanced his money to her mother who then had invested this money with the appellant. Under the circumstances, undoubtedly the identity of .....

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iving loan, the creditworthiness of these persons therefore cannot be said to be proved. The additional made by the Ld.AO is based on the material on record and also on the circumstantial evidences indicating that the immediate sources of advancing loan stands unexplained in accordingly upheld. This ground of appeal is thus dismissed. Apparently, the learned CIT(A) discredited the said credit on the basis of creditworthiness. He relied upon the Income Tax return of the creditors. Gopalji V. Vara .....

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Late Manchhagauri M. Andharia is concerned, in this regard the confirmation of account for the period from 01.04.2008 to 31.03.2009 is on the file which speaks about the closing balance of the Manchhagauri M. Andharia is to the tune of ₹ 4,44,230.00. Bank statement of Hina Maganlal Andharia has also been produced which is at page 7 of the paper book and speaks about some transactions which is required to be verified in the interest of justice also. However, it is also recorded that the sta .....

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nce the assertion of the assessee has been declined by the Assessing Officer as well as confirmed by the learned CIT(A) on the ground of noncreditworthiness of the creditors but the said documents were not discussed therefore, we are of the view that the matter of controversy in this regard is also required to be re-examined by taking into account the above mentioned documents to decide the claim of the assessee in the interest of the justice therefore we restore this issue upon the file of Asse .....

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r as, disallowance of ₹ 1,65,830/- u/s. 14A of the Act read with Rule 8D of the Rules is concerned, we find that as per letter dated 15.11.2012, of the assessee, addressed to the DCIT, the assessee, during the relevant period earned ₹ 89,981/- (dividend from shares), ₹ 2,92,557/- (dividend from mutual fund) and ₹ 6,12,061/- (PPF interest). This income was generated from the shares, mutual fund and PPF, which was treated as investment in the balance sheet. The expenses deb .....

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emicals. It was empathetically asserted that none of the loan, taken on which interest was paid, was utilized for investment purposes. In view of these facts, we find merit in the explanation of the assessee, consequently, this ground of assessee is allowed. 5.1 Turning to the case in hand it is specifically asserted by the assessee that the appellant is maintaining separate accounts of the business carried on by him and his investment activities. The investment activities and its expenses are r .....

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of ₹ 2,00,977/- and current assets of ₹ 2,67,57,531/- i.e. ₹ 2,69,58,508/-. The investment shown in the proprietary firm s balance sheet is in Fixed Deposit with banks, interest of which is very much taxable. The appellant had earned a profit of ₹ 2,08,22,452/- during the year under consideration. His capital, even after considering the investment in shares during the year of ₹ 74,31,583/-, increased from ₹ 2,99,95,455/- as at the beginning of the year to S .....

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