TMI Blog2019 (9) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... view that it can safely be concluded that sufficient opportunity was not afforded to the assessee for furnishing the confirmations of the aforementioned parties in the course of the assessment proceedings. A perusal of the confirmations of the parties that the same mainly pertains to the same parties to whom interest on loan, office rent etc was paid by the assessee during the year under consideration. Accordingly, now when the A.O had not drawn any adverse inferences as regards the genuineness of the aforesaid interest expenditure, rent expenditure claimed by the assessee in its profit and loss account for the year under consideration viz. A.Y. 2013-14, therefore, the said fact in itself inspires substantial confidence as regards the genuineness of the credits appearing against the names of the aforementioned parties. CIT(A) was in error in declining to admit the aforesaid confirmations which were filed by the assessee as an additional evidence under Rule 46A of the Income Tax, Rules, 1962. Addition u/s 41(1) - HELD THAT:- Admittedly, as per Sec. 41(1), in a case where the deduction has been made in the assessment for any year in respect of any trading liability incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cernible from the orders of the lower authorities, in the absence of any explanation as regards the nature and source of the aforesaid amount, the same had been added by the A.O to the returned income of the assessee. We have given a thoughtful consideration to the said issue and finding no infirmity in the view taken by the CIT(A) confirm the said addition. - ITA Nos.3671 & 3672/Mum/2018 - - - Dated:- 28-8-2019 - Shri Shamim Yahya, Accountant Member And Shri Ravish Sood, Judicial Member For the Appellant : Shri Sanjay R. Parikh, A.R For the Respondent : Shri Rajeev Gubgotra, D.R ORDER PER RAVISH SOOD, JM The present appeals filed by the assessee are directed against the order passed by the CIT(A)-28, Mumbai under Sec. 250(6) of the Income Tax Act, 1961 r.w.rule 46A(2) of the Income Tax Rules 1962, dated 13.03.2018 for A.Y. 2013-14. As the issues involved in the captioned appeals are inextricably interlinked and interwoven, therefore, the same are being taken up and disposed off together by way of a consolidated order. Before adverting to the respective appeals, we may her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 6,31,820/-. Subsequently, the case of the assessee was selected for scrutiny assessment under Sec.143(2). The A.O vide his order passed under Sec. 143(3), dated 11.03.2016 inter alia made an addition under Sec. 68 in respect of cash credit appearing in the books of accounts of the assessee against the name of 19 parties, as under: Sr. No. Particulars Amount 1. Arti Jasani 6,748 2. Arvind M. Shah 27,000 3. Ashit Doshit HUF 1,32,000 4. Devayani Ganatra 87,750 5. Hemal M. Shaveri 5,00,000 6. Jignesh S. Sanghvi 3,35 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it had failed to avail, therefore, the said fresh documentary evidence could not be admitted in the course of the appellate proceedings. Apart therefrom, the CIT(A) was also of the view that the confirmations filed by the assessee did not inspire much of confidence and appeared to be in the nature of cooked up documents. Accordingly, on the basis of his aforesaid observations the CIT(A) declined to admit the aforesaid additional evidence, vide his order passed under Rule 46A(2) of the Income Tax Rules, 1962, dated 13.03.2018. 4. Aggrieved, the assessee has assailed the aforesaid order passed by the CIT(A) under Rule 46A(2) of the Income Tax Rules, 1962, which as observed by us hereinabove would merge with the order passed by him under Sec. 250(6) of the Act. We find that it was the claim of the assessee before the CIT(A) that initially on 26.06.2015 it was called upon to furnish certain information in the course of the assessment proceedings, which was duly complied with and the requisite documents as were called for by the A.O were filed on 29.07.2015. Also, subsequent replies to the notices issued by the A.O were filed till Janua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the authorized representatives for both the parties and have perused the documentary evidence which was filed by the assessee by way of additional evidence under Rule 46A before the CIT(A). We find substantial force in the claim of the ld. A.R that as the assessee was not afforded sufficient time for furnishing the aforesaid confirmations of the parties in the course of the assessment proceedings, therefore, the same could not be obtained by him from the parties and thereafter filed with the A.O. Nothing is discernible from the orders of the lower authorities from where it could be gathered that the assessee was afforded sufficient time to furnish the confirmations of the aforementioned 19 parties in the course of the assessment proceedings. In fact, a perusal of the notice issued under Sec.142(1), dated 15.02.2016, reveals that the A.O had observed that the assessee as on 07.01.2016 was directed to furnish the confirmations along with the other details in respect of the aforementioned parties. Accordingly, we are of the considered view that it can safely be concluded that sufficient opportunity was not afforded to the assessee for furnishing the confirmations of the aforementi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be deleted. B) Disallowance u/s . 40(a)(ia) - ₹ 1,32,875/- 3) The learned CIT(A) er red on facts and in law in conf i rming the disallowance made by the AO of ₹ 1,32,875/- u/s. 40(a)(ia). 4) The appellant prays that the disallowance made by the AO of ₹ 1,32,875/- u/s. 40(a)(ia) and confirmed by the CIT(A), may be deleted. C) Addition u/s. 68 - ₹ 1,30,85,423/- 5) The learned CIT(A) erred on facts and in law in confirming the addition made by the AO u/s. 68 of ₹ 1,30,85,423/- 6) The learned CIT(A) erred in not admitting the additional evidences filed by the appellant in this regard. 7) The appellant prays that the addition of ₹ 1,30,85,423/- made by the AO u/s. 68 and confirmed by the CIT(A), may be deleted. D) Addition on account of capital receipt - ₹ 2,92,589/- 8) The learned CIT(A) erred on facts and in law in confirming the order of the AO making an addition of ₹ 2,92,589/- as a revenue receipt. 9) The appellant prays that the addition made by the AO of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration. In sum and substance, as to on what basis the cessation of the aforesaid liability had been related to year under consideration is also not discernible from the assessment order. Accordingly, we are unable to persuade ourselves to sustain the aforesaid addition of ₹ 7,51,308/- made by the A.O under Sec.41(1) of the Act, and thus vacate the same. The Grounds of appeal Nos. 1 2 are allowed. 4. We shall now advert to the disallowance under Sec. 40(a)(ia) aggregating to ₹ 1,32,875/- made by the A.O in context of 4 parties viz. (i) Arvind M. Shah: ₹ 60,750/-; and (ii) Devyani Gonatra: ₹ 54,000/-; (iii) Jogesh Jasani: ₹ 3750/-; and (iv) Kamlesh N. Doshi: ₹ 14,375/-. As is discernible from the assessment order, as the assessee had failed to deduct tax at source on the interest payments made to the aforementioned parties, therefore, the same was disallowed by the A.O under Sec.40(a)(ia) of the Act. Interestingly, we find that all of the aforesaid 4 parties appear in the list of the 19 parties in respect of which addition had been made by the A.O under Sec.68 of the Act. As we have restored the addition made by the A.O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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