TMI Blog2019 (6) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... n by these people and urgency that arose to make payments in cash. We are therefore inclined to set aside this issue back to Ld.CIT(A) for proper verification. Assessee is directed to file all details/evidences regarding work carried out by these people required to establish actual cash payment and urgency to make payment in cash. - Decided in favour of assessee for statistical purposes. Disallowance u/s 36 (1) (vii) - bad debt written off - no action to recover the debts - HELD THAT:- After amendment to section 36 (1) (vii), though assessee is only to write off the debts as irrecoverable in its account in order to claim deduction of bad debts, however, evidences of claim to be existing like invoices must be filed. Thus in view of evidences filed by assessee, we allow debts written off by assessee in respect of Mirra and Mirra Industries, Sandeep Industries and Bindal Industries respectfully following decision of TRS Ltd vs CIT [ 2010 (2) TMI 211 - SUPREME COURT] and debts in respect of other parties stand confirmed. Disallowance of sum for using car of company by directors - AO disallowed 1/5th of maintenance expenses and towards depreciation on 12 cars - Ld.CIT(A) restrict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ld.AO has not placed on record any instances of a job work carried out in respect of similar product as that of assessee to be a yardstick to form belief that payment made by assessee was excessive and/or unreasonable. Under such circumstances and after going through detailed evidences filed by assessee in the paper book, we are not in agreement with observations of authorities below and addition made deserves to be deleted . Addition of undisclosed closing stock of finished goods - HELD THAT:- CIT (A) proceeded on the footing that goods sold were from part of semi-finished goods and that assessee could not file details of goods sold. From documents placed in paper book, we are of considered opinion that goods sold are verifiable from excise records and semi-finished goods are verifiable from work in progress which was shown at closing of preceding year. We are of opinion that authorities below without verifying all these details merely on some surmises has made the addition. There is no iota of dispute in respect of documents filed by assessee by authorities below. This is a case where Ld. AO has failed to verify details as per records filed by assessee. We are therefore not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record. 6. That in any case and in any view of the matter, action of Ld. CIT(A) in not deleting the action of Ld. AO in not deleting the disallowance of ₹ 7,00,000/- fully as made by Ld. AO under the head depreciation and maintenance of car and further erred in sustaining the disallowance to the extent of ₹ 2,80,738/- which is bad in law and against the facts and circumstances of the case. 7. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not deleting the disallowance of ₹ 6,44,148/- fully made by Ld. AO on account of foreign tours and further erred in sustaining the disallowance to the extent of ₹ 2,38,148/- and that too without any basis, material and evidences available on record. 8. That in any case and in any view of the matter, action of Ld. CIT(A) in not deleting the action of Ld. AO in not deleting the disallowance of ₹ 6,44,148/- fully made by Ld. AO on account of foreign tours and further erred in sustaining the disallowance to the extent of ₹ 2,38,148/- which is bad in law and against the facts and circumstances of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of the Ld. AO in charging interest u/s 234B of the Income Tax Act, 1961. 17. That the appellant craves leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. 2. Facts of the case in brief are as under. Assessee filed its return of income on 29/09/10 at ₹ 2,25,35,030/-. Case was selected for scrutiny and subsequently notice under section 143 (2) and 142 (1) of the Income Tax Act, 1961 along with questionnaire was issued to assessee. In response to statutory notices, representative of assessee appeared before Ld. AO and filed requisite details. 2.1. Ld.AO observed that assessee is primarily engaged in manufacturing, supply, commissioning of wire drawing plant and machinery of various metals and their alloys. It was observed that company is manufacturing capital goods of different types and proportions. 2.2. After going through details and replies filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been disputed by Ld.AO. He submitted that assessee produced bills and vouchers and relevant evidences in respect of same. 4.2. On the contrary Ld. DR submitted that criteria for allowability of expenditure under section 40 A (3) is not to explain genuineness of transaction. Ld.DR submitted that the moment assessee makes cash payments exceeding ₹ 20,000/- a day to a person, disallowance deserves to be made under the said section. On perusal of order passed by Ld. CIT (A) assessee took a plea that payment has been made to assessee s agent, and therefore, it falls within exception of Rule 6 DD (k). He submitted that Ld. CIT (A) dismissed this argument by recording that persons to whom cash payment has been made are not agents of assessee. 5. We have perused submissions advanced by both sides in light of records placed before us. 5.1 . From list of payments made in cash by assessee, it is observed that none of the payments have been made to any particular person exceeding ₹ 20,000/- in a day. Payment has been made by assessee on various dates to various people, except payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liance upon decision of Hon ble Supreme Court in case of TRS Ltd vs CIT reported in (2010 ) 323 ITR 397 , Ld.Counsel submitted that Ledger account of debtors placed at page 63 of paper book, gives details of debtors and outstanding payments due to assessee and further details along with invoices and reminders sent by assessee to these debtors has been placed at page 64-80 of paper book. 6.2. On the contrary Ld. DR placed reliance upon observations of Ld. CIT (A). 7. We have perused submissions advanced by both sides in light of records placed before us. 7.1. It is observed that most of these payments pertain to preceding financial years and assessee issued various reminders to these debtors. However from the list placed at page 63 and upon verification of pages 64-88 it is observed that evidences has been filed by assessee in respect of Mirra And Mirra Industries, Sandeep Industries and Bindal Industries establish the debt due to assessee. In respect of other debtors being Sandvik Asia Industries Ltd, IPM Industries, no details has been furnished in paper book filed before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w taken by Ld.CIT(A). Accordingly these grounds raised by assessee stands dismissed. 9. Ground No. 7-8 is in respect of disallowance of ₹ 2,38,148/- on account of foreign tours. 9.1. Ld.Counsel submitted that said expenditure was incurred by assessee for purposes of business. And details of travel were submitted before the authorities below. Ld.Counsel placing reliance upon page 120-121 of paper book submitted that Sh. Tyagi for attending Interwire Trade Exposition, which was held on April 25- 30, 2009 at U.S. He submitted that details relating to trade fair and bills regarding stay of Sh. Tyagi has been placed at pages 118- 287 of paper book. 9.2. Ld.DR placed reliance upon the view taken by Ld. CIT (A). 9.3 . We have perused submissions advanced by both sides in light of records placed before us. 9.4. It is observed that details filed by assessee before authorities below has not been doubted and no further verification has been carried out by authorities below in order to establish any falsity of submissions made by assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the contention of assessee that advance from Piyush Steel Limited was an old advance for purchase of machinery and same was repaid over years since purchase deal did not fructify. It has also been submitted by assessee in written submission dated 12/03/13 filed before Ld. AO, placed at page 217 of paper book that whole of the amount has been repaid by financial year 2010-11. 11.2 . Assessee placed reliance upon confirmation letter issued by Piyush Steels Ltd dated 22/02/14 placed at page 241 of paper book which reveals outstanding balance as on 01/04/09 to be ₹ 10,95,800/-, and as per ledger account placed at page 143 closing balance as on 31/03/10 was ₹ 7,75,800/-. As per Ledger account at page 144 of paper book said sum of ₹ 7,75,800/- was paid by assessee during financial year 2010-11. We are therefore in agreement with argument advanced by Ld.Counsel that as the entire amount has been refunded back there is no question of any situation of liability during year under consideration. 11.3 . We do not find any reason to doubt the explanation offered by assessee which is substantiated by account statements place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per book, we are not in agreement with observations of authorities below and addition made deserves to be deleted . 13.2. Accordingly this ground raised by assessee stands allowed. 14. Ground No. 13-14 is in respect of addition of sum of ₹ 64,02,705/-, on account of alleged undisclosed closing stock of finished goods. 14.1. Ld.Counsel submitted that assessee was not having any closing stock of finished goods during year but it was having closing stock of semi-finished goods to a tune of ₹ 2,77,68,632/- out of which some of goods were completed up to stage of 90% which is verifiable from sale for prior period from stock of work in progress. He placed reliance upon the chart placed at page 184 of paper book and invoices generated for goods sold from 01/04/10 onwards. He also placed reliance upon excise record giving value of the stage of completion of stock which is placed at page 184-186 of paper book. It has been submitted by Ld.Counsel that sale of finished goods is as per excise record and what remained was semi-finished goods as on 31/03/10. 14.2 . On the contrary Ld.DR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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