TMI Blog2018 (12) TMI 1384X X X X Extracts X X X X X X X X Extracts X X X X ..... e allegations made are generic and in the light of evidences submitted by the assessee before him how he has ignored the same. It is important to point out that the assessing officer has not rejected the books of accounts nor has held that the assessee is not carrying any business. The expenses incurred are accounted for in the books of account and there is no material brought on the record by the AO that these expenses have not been actually incurred. Addition u/s 40A(2)(b) on account of remuneration to director - AO has made the above disallowance in respect of payment made to Mr. Abhishek Asthana who holds only 5% share of the assessee company - Held that:- CIT(A) has deleted the addition holding that the remuneration paid is neither excessive nor unreasonable. Mr. Abhishek Asthana is a qualified Chartered Accountant and looking after the overall affairs. The learned DR could not controvert the above facts. The remuneration paid to Mr. Ashthana being a Chartered Accountant can’t be said to be excessive. Further he is looking after the overall affairs. The observation the assessing officer on this issue is factually incorrect. Addition in respect of the service charges rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition. The reasoning given by the AO is incorrect. As held in ground no. 2 the assessee is very much carrying on the business and this addition made by the AO is unsustainable. Further the addition of ₹ 6,76,299/- has been rightly deleted by the Ld. CIT(A). This was the loan given by the assessee in the preceding year and has been received back during the year. As regards the further addition of ₹ 8,48,803/- the same represents the creditors for the various services and expenses outstanding as on last day of the year. CIT(A) was correct in deleting these additions. - ITA No. 3701/DEL/2015 - - - Dated:- 5-11-2018 - Shri H.S. Sidhu, Judicial Member And Shri L.P. Sahu, Accountant Member For the Assessee : Sh. Ved Jain, Adv. Sh. Ashish Goel, CA Sh. Rishabh Jain, CA For the Department : Smt. Ranu Mukharjee, Sr. Dr. ORDER PER H.S. SIDHU, JM The Revenue has filed this appeal against the impugned order dated 25.3.2015 relevant to assessment year 2011-12 on the following grounds:- 1. The Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in deleting the addition of ₹ 54,08,275/- made by AO on account of unex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal before the Tribunal. 3. Ground no. 1 in Revenue s appeal is regarding the deletion of the addition of ₹ 54,08,275/- made by the AO on account of unexplained cash receipts. It was agreed by both the Ld. DR and Ld. AR that this issue is identical to the issue in the case of Piron Education Pvt. Ltd. (ITA NO. 3699/Del/2015) (AY 2011-12) where the Assessing Officer has made similar addition on the same reasoning. In the said appeal in the case of ACIT vs. Piron Education Pvt. Ltd. in ITA No. 3699/Del/2015 (AY 2011-2) vide order dated 31.10.2018, we have held that the addition is unsustainable as the cash deposited is as per the books of accounts being regularly maintained by the assessee. The Assessing Officer has not pointed out which cash receipt or deposited in the bank is unaccounted for. From the documents filed before the Assessing Officer placed at Paper book Page 217 it is evident that assessee has given explanation for each receipt and deposit in the bank. Since the facts are identical following our order dated 31.10.2018 and the reasoning in the above said order we uphold the order of the Ld. CIT(A) deleting this addition and this ground is dismissed accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and there is no material brought on the record by the AO that these expenses have not been actually incurred. In view of the above facts we uphold the order of the CIT(A) on the issue in dispute and accordingly this ground of appeal raised by the Revenue. 5. Ground no.3 in Revenue s appeal is regarding the deletion of addition of ₹ 6,00,000/- made by AO under section 40A(2)(b) on account of remuneration to director. The AO has made the above disallowance in respect of payment made to Mr. Abhishek Asthana who holds only 5% share of the assessee company. The CIT(A) has deleted the addition holding that the remuneration paid is neither excessive nor unreasonable. Mr. Abhishek Asthana is a qualified Chartered Accountant and looking after the overall affairs. The learned DR could not controvert the above facts. The remuneration paid to Mr. Ashthana being a Chartered Accountant can t be said to be excessive. Further he is looking after the overall affairs. The observation the assessing officer on this issue is factually incorrect. In view of the above facts we uphold the order of the CIT(A) on the issue in dispute and this ground no. 3 of Revenue s appeal is dismissed. 6. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 50,03,066/- Nil Nil 3. M/s Piron Design Pvt. Ltd. ₹ 5,27,000/- ₹ 5,27,000/- Nil Nil 4. M/s Piron Education Pvt. Ltd. ₹ 8,94,100/- ₹ 8,94,100/- Nil Nil Total ₹ 65,78,666/- ₹ 65,78,666/- Nil Nil 7. We find that a similar addition on the above accounts was also made by the Assessing Officer in the case of ACIT vs. Piron Education Pvt. Ltd.(ITA NO. 3699/Del/2015) (AY 2011-12). In the said case we have analysed all the facts and the documents and after examination, we have deleted the addition. The relevant finding in the said order are as under: 13.1 Ongoing through the assessment order we note that the AO has made addition in respect of the amount paid back by the assessee to the following parties not the amount received from these parties: S.No. Name of the party fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank account maintained with Vijaya Bank. It has a running account being a sister concern with assessee as is evident from the copy of account placed at PB. Pg. 267. 13.3 The second case is that of Piron Consulting Pvt. Ltd. This is a sister concern of the assessee. The assessee has received a sum of ₹ 8,94,100/- during the year and paid the same back during the year. The documents filed before the AO in respect of this creditor is placed in the PB. Pg. 288-306 which include confirmation copy of ledger account, bank statement and audited balance sheet and ITR. This company is being assessed with the same AO and in fact assessment order for the same year under consideration has been passed by the AO on 26th February, 2014 under Section 143(3) and no adverse inference has been drawn in respect of this amount received and paid back during the year in that order. The copy of account is placed at PB. Pg. 289 which is a running account. The AO has simply added the aggregate amount of the credit without even considering that this is a running account between the two concerns. The payments have been made and received from the regular bank account and there is nothing abnormal i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Director of assessee company. The assessee company has received a sum of ₹ 7,64,453/0 and paid back ₹ 7,64,453/-. The documents filed before the AO in respect of this account are placed at PB. Pg. 256 to 265 which include confirmation, copy of ledger account, bank statement and ITR. The assessee has also filed audited balance sheet and profit and loss account of the proprietorship firm of Mr. Ashish Aggarwal also. As per the ITR the taxable income declared is 10,19,400/-. This is also a running account with a director Mr. Ashish Aggarwal as is evident from the copy of account placed at PB. Pg. 258. The AO has simply added the aggregate credit without considering the nature of the account being that of a current account. The payments have been made and received through regular bank account of Mr. Ashish Aggarwal and there is nothing abnormal in the bank statement of Mr. Ashish Aggarwal so as to draw any adverse inference. 13.7 The sixth and the last case is that of Mr. Ankur Aggarwal, Director of the assessee company. Assessee has received a sum of ₹ 36,63,500/- during the year and has paid back ₹ 22,46,500/- with the result that there was a credit balan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts bank accounts. It was agreed by both the parties that this issue is identical to the issue in the case of M/s Piron Education Pvt. Ltd. (ITA NO. 3699/Del/2015) (AY 2011-12) where the Assessing Officer has made similar addition on the same reasoning. In the said appeal in the case of M/s Piron Education Pvt. Ltd. we have held that the addition is unsustainable as the cash deposited is as per the books of accounts being regularly maintained by the assessee and such cash in books of accounts represents the fee receipt from the students which has been included in the income. Since the facts are identical following our order and the reasoning in the above said order we uphold the order of the Ld. CIT(A) deleting this addition. And this ground is dismissed. 9. Ground No. 7 in Revenue s Appeal is regarding deletion of the additions of ₹ 1,31,863/-, ₹ 6,76,299/- made by the AO being false expenses and ₹ 8,48,803/-made by the AO on account of unexplained credit of money. The Assessing officer has made the addition of ₹ 1,31,863/- treating the amount of addition to fixed assets of the assessee as false expenses. Further the addition of ₹ 6,76,299/- was mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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