TMI Blog2017 (1) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... -cut finding discernible from the order of the AO. Therefore,no reason to interfere in the finding of the ld.CIT(A). - Decided in favour of assessee Addition on account of interest corresponding to the amounts outstanding against debtors - Held that:- No merit in this ground of appeal because there is no decision at the end of the AO to assume notional interest income and, thereafter, assume that interest expenses claimed by the assessee to be disallowed. He has not demonstrated any nexus as to how interest bearing funds were diverted for the non-business purposes. The ld.CIT(A) has rightly deleted the addition.- Decided in favour of assessee - ITA No. 6275/Del/2015 - - - Dated:- 6-1-2017 - Shri Rajpal Yadav, Judicial Member Assessee By : Shri R.K. Garg, Advocate Department By : Shri S.K. Jain, Sr.DR ORDER Per Rajpal Yadav, JM The Revenue is in appeal before the Tribunal against the order of the ld. CIT(A) dated 20th August, 2015. The grounds of appeal taken by the Revenue read as under:- 1. The Ld OT(A) has erred in law as well on facts in deleting the addition of ₹ 14,29,235/- made by the A.O. on account of unverifiable sundry creditors. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port Industries, Meerut reply stated that therequest has been made to comply with the notice by your honour. When the burden of proof lied with assessee, the same was not complied. Thus credit amount of ₹ 7,33,115/- and Rs, 6,96,120/- against Jai Timber Plywood Gzb. Sonu Sports Ind. Meerut remained unexplained. Records of the assessee produced in support but in the absence of stock register neither quantity of purchases could be verified nor correct G.P. could be verified. In view of these facts, sundry credit amount of ₹ 7,33,115/- and ₹ 6,96,120/- total at ₹ 14,29,235/- is treated as unexplained liability and added to the income of the assessee. . [Addition: ₹ 14,29,23S/-] Further there is purchase of ₹ 23,66,713/- from M/s Jai Timber Plywood, Gzb and ₹ 49,51,320/- from M/s Sonu Sports Ind. Meerut. Both these so called sellers are outstationed at Ghaziabad and Meerut. Payment reflects as per copy of accounts furnished, in cash being ₹ 20,000/- or less on a single day. In this case of M/s Sonu Sports Ind. Meerut payment of ₹ 4,50,000/- on 29/03/2010, ₹ 10,00,000/- on 30/03/2010 and ₹ 70,000/- on 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61 for the concealment of income are being initiated separately. 3. As far as the first issue is concerned, the Assessing Officer was of the view that since sundry creditors did not respond to his notices, therefore, these are not genuine and he made the addition. On appeal, the ld. First appellate authority has considered this aspect and observed that the assessee has made repayment of these loans by a/c payee cheque in the next year and they cannot be doubted. The brief findings recorded by the first appellate authority in this connection read as under:- Further, the action of the AO in making trading addition at ₹ 14,29.235/- is self contradictory in the sense that the AO on one hand, by not rejecting the books of account in other words is accepting the trading results but on the other hand, by making trading addition at ₹ 14,29,235/- is disturbing the trading results which have already been accepted by him. Merely because. notice u/s 133(6) of the Act was not served or no Compliance was made the aforesaid sundry creditor cannot be a ground for making addition of ₹ 14,29,235/-. The AO has not brought any adverse material evidence on record to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otherwise than account payee cheque or bank draft exceeded ₹ 20,000/-. Therefore, for applicability of section 40A(3), it is essential that the aggregate payment made to a person on any day should exceed ₹ 20,000/- That if the assessee makes the payments not exceeding ₹ 20,000/- every day, it cannot be said that the payment has been made to circumvent the provisions of section 40A(3) of the Act. Section 40A(3) would be applicable when the assessee makes payment exceeding ₹ 20,000/- in a day. If there is no payment exceeding ₹ 20,000/- in a day, there is no violation of section 40A(3) of the Act, so there is no question of any circumvention of the provisions. It is observed that the appellant has copy of accounts of M/s Jai Timber Plywood, Ghaziabad and M/s Sonu Sports Industries, Meerut. From the perusal of such copies of account it is gathered that no payment exceeding ₹ 20,000/- in a day has been made by the appellant. The fact on record is that no payment exceeding ₹ 20,000/- has been made in violation of provisions of section 40A(3) of the Act. Thus the addition made by the AO is based on presumption and surmises and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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