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TMI Blog2021 (7) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... credit balance made by the AO to the extent of Rs. 43,759/- by treating the same as bogus and excessive. 3. The learned CIT(A) has erred both in law and on the facts of the case in confirming the addition made by the AO to the extent of Rs. 12,60,000/- being outstanding creditors u/s.68 of the Act. 4. The learned CIT(A) has erred both in law and on the facts of the case ir. Confirming the action of the AO of disallowing Rs. 32,022/-being 20% of various vehicle expenses. 5. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 6. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld.AO in levying interest u/s.234A/B/C of the Act. 7. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld.AO in initiating penalty u/s.271(1)(c) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax. Accordingly, we do not find any infirmity in the order of the authorities below. Hence, the ground of appeal of the assessee is dismissed. 10. The 2nd issue raised by the assessee is that the learned CIT (A) erred in confirming the order the AO by sustaining the addition of Rs. 43,759.00 representing unreconciled credit balance. 11. The AO during the assessment proceedings found that there was the difference in the balance of sundry creditor namely M/s Canbara International private Ltd between the ledger and the balance sheet of the assessee amounting to Rs. 1,40,041.00 which was not reconciled by the AO. Accordingly the AO treated the same as income and added to the total income of the assessee. 12. Aggrieved assessee preferred an appeal to the learned CIT (A) who reduced the addition made by the AO to Rs. 43,759.00 by observing as under: 4.3 Ground No.3 pertains to addition of Rs. 1,40,041/- being the excessive credit balance shown in the name of Canbara international Pvt. Ltd. The Assessing Officer noticed that in the Balance Sheet, credit balance of Rs. 2,35,643/- was shown, but the Ledger revealed credit balance of Rs. 95,602/-. The appellant has furnished a detaile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l income of the assessee in the year under consideration. 15. On the other hand, the learned DR vehemently supported the order of the authorities below. 16. We have heard the rival contentions of both the parties and perused the materials available on record. On perusal of the copies of the ledgers placed on pages 54 to 56 of the paper book, we note that such difference is arising in the account of the sundry creditor on account of opening balance which were carried forward from the preceding year. Therefore such difference in the opening balance cannot be added to the total income of the assessee in the year under consideration. The impugned difference, if liable to be added to the total income of the assessee, then the same can be done in the year to which it relates and not in the year under consideration. At the time of bearing, the learned DR has not brought anything on record contrary to the argument advanced by the learned AR for the assessee. Accordingly we do not find any reason to uphold the finding of the authorities below. Hence, the ground of appeal of the assessee is allowed. 17. The next issue raised by the assessee is that the learned CIT (A) erred in confirmi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out through the banking channel and therefore the genuineness of the same cannot be doubted. Had there been any doubt by the AO about the credit worthiness of the party, the same should have been verified by the AO by issuing notice under section 133(6)/131 of the Act but the AO has failed to do so. 24. On the other hand the learned DR vehemently supported the order of the authorities below. 25. We have heard the rival contentions of both the parties and perused the materials available on record. With respect to the addition of Rs.90,000 in respect of Bhavin D. contractors, we note that such addition was not subject matter of dispute before the AO. This fact can be verified from the copy of the ledger of the party placed on page 57 of the paper book. Admittedly, such addition can be made by the learned CIT (A) only after affording the opportunity of being heard to the assessee on account of such enhancement. But the learned CIT (A) has not done so and therefore such enhancement in the addition is not sustainable. Accordingly we direct the AO to delete the addition of Rs.90,000 in respect of Bhavin D. contractor. 25.1 Regarding the addition of Rs. 11,70,000 in respect of Shri Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business, cannot be ruled out and accordingly disallowance made by the Assessing Officer which is very reasonable, is sustained. Hence, Ground No. 5 is dismissed. 29. Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. 30. The learned AR before us submitted that the addition has been made by the authorities below on presumption basis without pointing out any defect in the audited books of accounts. As such under the law, there is no provision for making the disallowance on ad hoc basis. 30.1 The learned AR also contended that if the addition with respect to the insurance claim is confirmed as raised in the ground No. 1 then it will lead to the double addition. 30.2 The learned AR alternatively contended that the disallowance at the rate of 20% is on the higher side and prayed to make some token disallowance in the interest of justice. 31. On the other hand, the learned DR vehemently supported the order of the authorities below. 32. We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion we note that the AO has made the disallowance at the rate of 20% of the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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