TMI Blog2017 (12) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 50,000/-. Addition u/s 68 on account of loan taken from Sh. Prem jeet Singh - Held that:- In the present case, it is noticed that the assessee furnished the copy of confirmation received from the creditor Sh. Prem Jeet Singh from whom the loan of ₹ 1,00,000/- was received through cheque which is evident from copy of the bank statement placed. The said bank statement was not available during the course of assessment proceedings. However, it was obtained on 19.03.2015 while the AO closed the proceedings on 16.03.2015. The assessee also requested the AO to issue the summon u/s 131 but that request was not accepted by the AO for the reason based known to him. In the present case, the loan of ₹ 1,00,000/- was received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd filed the return of income on 22.09.2012 declaring an income of ₹ 13,87,660/-. Later on, the case was selected for scrutiny. During the course of assessment proceedings, the AO noticed that the net profit rate declared by the assessee was vbetter than the earlier year. He asked the assessee to produce complete books of accounts alongwith supporting bills/vouchers for expenses claimed in profit and loss accounts. The AO observed that the assessee had debited following expenses in the profit and loss accounts: Business Promotion - Rs.2,18,444/- Discount allowed - Rs.4,65,505/- Travelling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it appears that the disallowance had been made by the AO for the reasons that most of the expenses were paid in cash which were treated as unverified expenses. However, the AO did not point out any specific defects in the books of account, at the same time, the assessee also did not furnish the complete vouchers for the expenses incurred. In my opinion, the addition made by the AO and sustained by the ld. CIT(A) is on higher side. I, therefore, to meet the ends of justice, deem it appropriate to sustain the disallowance of ₹ 50,000/- and as such the assessee will get a relief of ₹ 50,000/-. 10. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03/15 ( 10)copy of assessee reply letter 16/03/15 ( 11) copy of reply filed on 19/03/15 ( 12) copy of Bank statement of Sh. Prem Jeet Singh filed on 19/03/15 for verification of loan entry of ₹ 100000/- on 26/09/11 ( 13) copy of application U/s 154 of I. Tax Act dt 04/04/15 13. It was further submitted that the assessee received the loan by account payee cheque on 26.09.2011 and furnished the confirmation from the lender vide reply dated 11.11.2014 and tried to get the copy of bank account from the above lender but the assessee came to know that he faced some problem, so copy of bank account would be taken in 3 to 4 days time and the assessee requested the AO to issue summon u/s 131 of the Act for ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs ITO (1977) Taxation 48(6)- 155 (Bom-Trib.) Nathu Ram Prem Chnad Vs CIT (1963) 49 ITR 561 (All) CIT Vs Orissa Corporation (P) Ltd. (1986) 159 ITR 78 (SC) Add. CIT Vs Hanuman Agarwal (1985) 151 ITR 150 (Pat) 14. The ld. CIT(A) also asked the remand report from the AO who submitted that the assessee was asked to furnish the copy of ITR of Sh. Prem Jeet Singh alongwith copy of statement so that the genuinity and creditworthiness would be proved. But the assessee could not produce the ITR of the creditor nor could produce Sh. Prem Jeet Singh to prove the genuineness of the transaction. 15. In his rejoinder the assessee submitted that the transaction had routed through bank and copy of bank statement was furnished. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k account, it is held that the creditworthiness of creditor has not been substantiated by the appellant. The appellant's arguments that transaction has been made through bank, does not prove that the creditor had creditworthiness. Thus, the action of the AO, making an addition of ₹ 1,00,000/- u/s 68 is upheld and this ground of appellant is dismissed. 17. Now the assessee is in appeal. The ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the assessee furnished the confirmation received from Sh. Prem Jeet Singh who had given a cheque of ₹ 1,00,000/- on 26.09.2011 and the statement of bank account could not be obtained which was later on received and fu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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