TMI Blog2021 (2) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... ted loan [old cleared loans and newly availed loans] in the books of account of the assessee, whereas the creditor M/s. Sundaram Finance Ltd., has confirmed only new loan amount which telescope the aforesaid transactions including loans squared up during the year. AO as well as the ld.CIT(A) without considering reconciliation filed by the assessee along with necessary evidences including confirmation letter from M/s. Sundaram Finance Ltd., has made addition towards difference in liability u/s.68 of the Act, although said liability was non-existing liability, but continued to live in the books of account of the assessee due to inadvertent error. Therefore, we direct the AO to delete addition made towards non-existing liability on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the balance sheet including long term loans taken from M/s. Sundaram Finance Ltd. In response, the assessee submitted that it has availed various term loans from M/s. Sundaram Finance Ltd., for development of port and said loans has been shown as loan liability in the books of account with a corresponding debit to work-in-progress account. The assessee has also obtained a confirmation letter from the loan creditors and filed before the AO. During the course of assessment proceedings, the AO on the basis of confirmation letter filed by the assessee noticed that there is a difference of ₹ 3,19,50,279/- in respect of loans availed from M/s. Sundaram Finance Ltd., when it compared to loan liability shown in the books of account of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ress account. Although, the liability in respect of loan availed from M/s. Sundaram Finance Ltd., is only at ₹ 5,62,21,921/-which was confirmed by the creditor but in the books of account, the assessee has shown liability of ₹ 8,81,72,200/- which resulted in difference of ₹ 3,19,50,279/- when it compared to confirmation letter issued by the creditor. The AO ignored explanation furnished by the assessee and has made addition towards non-existing liability u/s.68 of the Act. 5. The ld.CIT(A) after considering relevant submissions of the assessee and also taken note of confirmation letter issued by M/s. Sundaram Finance Ltd., observed that the assessee is not able to furnish any details and evidences as to how the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d reconciliation explaining the difference between loan liability shown in the books of account and the loans as per confirmation letter and has also filed necessary evidences including ledger extracts explaining reversal of duplicate entries in the books of account by reducing amount from capital-work-in-progress. All these evidences are submitted before the ld.CIT(A). The ld.CIT(A) without considering evidences filed by the assessee has simply confirmed the addition made by the AO towards nonexisting liability in the name of M/s. Sundaram Finance Ltd., even though the creditor has subsequently clarified the amount of loan sanctioned and loan disbursed and also outstanding loan as on 31.03.2015. 7. The ld.DR on the other hand supporting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and a sum of ₹ 28,35,721/- under interest expenses. During the impugned assessment year, the assessee had availed a fresh project loan of ₹ 3,70,00,000/- as refinance loan vide loan contract No.J021000156. The creditor M/s. Sundaram Finance Ltd., has disbursed loan amount of ₹ 1,85,00,000/- on 27.10.2014 after adjusting previous outstanding loan and accrued interest towards loan availed vide contract No.1021000205 which was at ₹ 1,90,00,000/-. The assessee after receipt of fresh loan amount of ₹ 1,85,00,000/- ought to have removed the earlier loan outstanding at ₹ 1,62,86,000/- and accrued interest thereon at ₹ 28,35,721/- from the liability side and passed necessary entries closing the said loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utstanding and a sum of ₹ 28,35,721/- towards accrued interest, even though the earlier loan was closed in the books of accounts of M/s. Sundaram Finance Ltd. This resulted in duplicate entries of loan amount. The said difference has been reconciled and necessary entries has been passed in the books of account of the assessee to eliminate duplicate entries by debiting to loan account and crediting to work-in-progress account for a sum of ₹ 1,62,86,000/- and ₹ 28,35,721/- towards old loan account No.1021000205 and further sum of ₹ 1,85,00,000/- towards new loan account No.J021000156 and in this regard, the assessee has furnished necessary ledger extract which is part of page No.1,2 5 of typed set. Therefore, we are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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