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2016 (5) TMI 325 - ITAT MUMBAI

2016 (5) TMI 325 - ITAT MUMBAI - TMI - Addition on account of interest income - CIT(A) deleted addition - Held that:- We are of the considered view that the CIT(A) has decided the said issue after noticing that the final accounts filed by the assesee, was approved by Auditors, Board of Directors and Shareholders. The CIT(A) further took into consideration that the auditors have issued the separate certificate thereby confirming the stand taken by the ld. AR. Hence, we are of the view that the AO .....

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A) deleted addition - Held that:- CIT(A) has correctly held that the AO proceeded to make the additions only on the ground that no confirmation was submitted by the assessee, but during the appellate proceeding, assessee submitted the confirmation before the CIT(A)which was duly verified and examined by the AO in the remand proceeding. Therefore considering those facts the CIT(A) has rightly came to the conclusion that the additions made by the AO in the absence of confirmation are not sustainab .....

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ER Per Sandeep Gosain, J. M.: The Present Appeal has been filed by the Revenue against the order of Commissioner of Income Tax (Appeals)- 6, dated 22.03.2011 for A.Y. 2005-06 on the following grounds of appeal. 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition on account of interest income amounting to ₹ 48,84,624/-which had not been shown as income as per Note No.21 to Final account attached with the Return of Income duly certif .....

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e. The assessee company filed the return of income on 30/10/2005 declaring total loss of ₹ 13,05,710 /-. Later on the case was selected for scrutiny by CASS and in this respect the statutory notices were served upon the assessee. After considering the reply as well as the documents submitted by the assessee, the AO assessed the interest income of ₹ 48,84,624/- on the ground that Notes to Accounts has certification of Chartered Accountant that company has not accounted the interest in .....

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d the order of assessment. 3. Aggrieved by the order of the AO, assessee filed appeal before CIT(A) and the CIT(A) after considering the case of the assessee had partly allowed the appeal vide its order dated 22.03.11. 3.1 Aggrieved by the order of CIT(A) the revenue filed the present appeal before us on the grounds mentioned herein above. Ground no. 1 4. This ground relates to deletion of addition on account of interest income amounting to ₹ 48,84,624/-. In this context, Ld. DR appearing .....

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of the issue and the submissions made by the AR. A perusal of the original final accounts filed by the appellant containing notes to accounts indicates that the said accounts were only certified true copy and were not signed by either the Auditors or the Directors at the appropriate place, to authenticate the same. It is further noted that the appellant did furnish before the AO the duly signed final accounts which were authenticated by the Auditors and which did not contain the impugned note r .....

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d itself disclosed/added in the return the interest income accrued during the year. In that year, the only question raised by the appellant was regarding the allowability or otherwise of the expense relating to the earning of such income. The AR has further filed certificate from the Auditor certifying that they had not signed or certified any accounts for the years under consideration containing the impugned note. There is also merit in the AR s contention that the impugned income could not be .....

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rd of Directors and Shareholders. The CIT(A) further took into consideration that the auditors have issued the separate certificate thereby confirming the stand taken by the ld. AR. Hence, we are of the view that the AO was not justified in placing reliance on financial statements which were not approved by shareholders. After appreciating the same the ld. CIT(A) has rightly held that AR of the assessee had established that the final accounts approved by the Auditors, Board of Directors and Shar .....

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7. This ground relates to deletion of additions made by AO on account of unexplained cash credit of ₹ 1,31,22,734/-. Ld. DR representing the revenue relied upon the orders passed by AO, it was submitted that even after availing sufficient opportunities, the assessee could not prove its claim on unsecured loans and in this respect no confirmation letter has been filed as assured by the assessee. Therefore in those circumstances the AO has rightly held that the loan amount of ₹ 1,31,22 .....

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