TMI Blog2022 (4) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... T:- AO has made disallowance on ad hoc basis @ 5% of the expenses. No specific observation with regard to any irregularity in the records and Books of accounts has been pointed out by Ld. AO. Thus in the given facts where the assessee owns cranes, dumpers, trailors, trolleys and trucks etc., records regarding fuel expenses, daily allowance of drivers and toll tax paid are maintained, we find no justification in such ad hoc disallowance made by the Ld. AO ignoring the books of account and the tax audit report. Thus Ld. CIT(A) has rightly deleted the said disallowance. Ground no.3 raised by the revenue is dismissed. Disallowance of agricultural income - HELD THAT:- We find that the ownership of the agricultural land by the assessee is not in dispute and only estimation of income has been made by the Ld. AO. However looking to the fact that assessee has not filed complete details, also Ld. AO has made general remarks, therefore, being fair to both the parties we estimate the disallowance of agricultural income at ₹ 1 lakh and partly allow revenue s ground no.4 by confirming the deletion of addition at ₹ 5,80,640/- and sustaining disallowance of agricultural income at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals) (in short Ld.CIT]-III, Indore dated 22.09.2020 which is arising out of the order u/s 143(3) of the Income Tax Act 1961(In short the Act ) dated 30.03.2016 framed by ACIT (Central)- 2, Indore. 2. Registry has informed that the departmental appeal is time-barred by 50 days. Ld. CIT-DR submitted that due to current pandemic covid-19, the delay occurred which may be condoned in view of guidelines of Govt. of India and Hon ble Supreme Court. The Hon ble Supreme Court in Suo Motu Writ Petition (Civil) No.3 of 2020 dated 08.3.2021 has issued directions that in computing the period of limitation for any suit/appeal, the period for 15.3.2020 till 14.3.2021 shall stand excluded. Considering the same, we condone the delay in filing the departmental appeal and admit the same for hearing. 3. Brief facts of the case as culled out from the records are that the assessee is an individual engaged in the business of transportation contractor, handling of steel materials. Return of income for A.Y. 2013-14 filed on 30.09.2013 declaring income of ₹ 1,30,94,980/-. Case selected for scrutiny through CASS followed by serving of notices u/s 143(2) 142(1) of the Act. Ld. Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest paid on unsecured loan of KCL Infra Projects Limited amounting to ₹ 5,59,357 The Appellant prays that the said disallowance be directed to be deleted. 3. The Appellant craves leave to add to, alter and/or amend all or any of the foregoing grounds of appeal. The revenue has raised following grounds of appeal 1. On the facts and in the circumstances of the case, the Ld.CIT(A) has erred in law in deleting the addition of ₹ 3,86,23,218/- made by the Assessing officer on account of bogus unsecured loan and interest paid thereon. 2. On the facts and in the circumstances of the case, the Ld.CIT(A) has erred in law in deleting the addition of ₹ 3,57,623/- made by the Assessing officer on account of disallowance as per section 14A of the Income Tax, 1961 read with rule 8D. 3. On the facts and in the circumstances of the case, the Ld.CIT(A) has erred in law in deleting the addition of 21,33,556/- made by the Assessing officer on account of disallowance of various expenses. 4. On the facts and in the circumstances of the case, the Ld.CIT(A) has erred in law in deleting the addition of ₹ 6,80,640/- made by the Assessing offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee is engaged in business of handling, storage and transportation of heavy goods and steel material and also is in contract with Steel Authority of India, Rashtriya Ispat Nigam, Essar Steel, Jindal Steel and Power and Vizag Steel and for this it owns cranes, dumpers, trailors trolleys and trucks. The books of account are audited and tax audit report has been filed. Assessee has taken unsecured loan from alleged cash creditor M/s KCL Infra Projects Private Limited during F.Y. 2012-13 on three occasions i.e. ₹ 48 lakhs on 29th June 2012, ₹ 10 lakhs on 3rd July 2012 and ₹ 25 lakhs on 3rd July 2012. Interest of ₹ 5,59,357/- was credited in its account and paid after deduction of TDS. The alleged loan has been taken through banking channel. From the finding of Ld. AO making alleged addition we notice that Ld. AO observed that M/s KCL Infra Projects Private Limited has taken credit facility from bank @ 11.2% and this facility is used for giving loan to the assessee by charging interest @ 12% and if TDS component is deducted then the M/s KCL Infra Projects Private Limited will have net interest income of 10.8 % which is even lower than the interest paid by M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Ltd. h) Original Certificate of Kadamb Construction Private Limited. i) Memorandum of Association of KCL Infra Project Limited. j) Details of Interest paid to lender and TDS deducted by appellant. k) TDS Certificates, Details of TDS Deducted and paid and Form 16A and also details of TDS claimed by Lender Company. l) Statement recorded of Shri Mohan Jhawar (Director) during assessment proceedings of Shri Sanjay Shukla (Appellant) where he had confirmed the transaction, explained the source of loan advanced, furnished the details of projects completed. m) Submission of Documents and reply by KCL Infra Project Ltd in the case of the appellant. n) Articles of Association of KCL Infra Projects Ltd. o) Application to Assistant Commissioner (Income Tax) for change in registered office of lender company. p) Notice of situation or change of situation of registered office in compliance with Companies Act, 1956. 10. Based on the above facts none of which have been rebutted by Ld. DR by placing any contrary material on record, we are of the considered view that the assessee has successfully proved the identity and creditwor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00,000 ₹ 24,23,218/- 12.4 We find that Ld. CIT(A) has dealt with this issue elaborately taking note of all the relevant documents filed by the assessee and the settled judicial precedence on the issue of unexplained unsecured loan of ₹ 445 laksh and interest paid thereon ₹ 29,82,575/- and Ld. CIT(A) has partly allowed assessee s ground by sustaining the addition only with regard to loan taken from M/s KCL Infra Projects Private Limited at ₹ 83 laks and interest paid thereon at ₹ 5,59,357/- and deleting the remaining addition as observed in the finding given in para 4 to 11 at page no.13 to 56 of the impugned order. 12.5. As regards the loan taken from Jayant Security and Finance Ltd. Badodara at ₹ 1.25 crores and interest paid thereon at ₹ 8,79,041/-, we find that the alleged cash creditor is a limited company, Permanent Account No. and address has been provided. Loan taken through proper banking channel Confirmation of account is on record. Jayant Security and Finance Ltd. is a nonbanking financial company having experience of 26 years. This company is regularly assessed to tax and has also been su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench Nagpur in ITA No. 463/NAG/2013 dated 25.03.2019 wherein appeal of the revenue was dismissed. We therefore, find no infirmity in the finding of Ld. CIT(A) deleting addition made for loan taken from Manas Realtors Pvt. Ltd at ₹ 50 lakhs and shri Sushil Kumar Ratanlal Khowal at ₹ 50 lakhs and also deleting the disallowance of interest paid at ₹ 7,41,507/- and ₹ 3,32,876/- respectively. 12.8. Lastly as regards ₹ 12 lakhs taken from Chandoomal Govindram Indore we find that it is a partnership firm and book profit for the relevant assessment year is ₹ 14,31,429/-. This firm is regularly assessed to tax and in its own case the issue of addition made by the Ld. AO reached to this Tribunal in ITANo.862/Ind/1999 dated 24.04.2006 wherein this tribunal dismissed the revenue s appeal. Thus, looking to the fact that this partnership firm regularly assessed to tax, bank statement has been filed, confirmation account duly signed leaves no room for Ld. AO for making addition u/s 68 of the Act and thus rightly deleted by the Ld. CIT(A). 12.9. We also find merit in the finding of Ld. CIT(A) referring to various decisions including decision of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come of ₹ 12,32,723/-. Ld. AO however, treated 50% has expenses which assessee would have incurred and thus, allowed the claim of agricultural income only at ₹ 6,80,640/- and making addition of ₹ 6,8,640/- Ld. CIT(A) has though discussed the issue at page 59 of the impugned order but has not decided the issue. 15.1 We, however in the interest of justice and to end the litigation, adjudicate this ground and find that the ownership of the agricultural land by the assessee is not in dispute and only estimation of income has been made by the Ld. AO. However looking to the fact that assessee has not filed complete details, also Ld. AO has made general remarks, therefore, being fair to both the parties we estimate the disallowance of agricultural income at ₹ 1 lakh and partly allow revenue s ground no.4 by confirming the deletion of addition at ₹ 5,80,640/- and sustaining disallowance of agricultural income at ₹ 1 lakhs. Thus ground no.4 of the revenue s appeal is partly allowed. 16. Ground No. 5 6 relates to disallowance of depreciation of Rs.,9,93,337/- for personal use of motor car, disallowance of depreciation at ₹ 14,414/- claime ..... X X X X Extracts X X X X X X X X Extracts X X X X
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