TMI Blog2022 (5) TMI 1151X X X X Extracts X X X X X X X X Extracts X X X X ..... ade before AO as well as Ld. CIT(A) were before the authorities below but these authorizes have failed to appreciate the facts correctly. We find that the assessee has borrowed long term funds from NBFCs which were duly shown in the balance sheet note no. 3 and similarly short term borrowing from Bank of India in the form of cash credit was shown in note no. 3. We are of the considered view that the borrowings from NBFC, Bank can not be treated as unexplained cash credit u/s 68 of the Act which was done by the AO simply on the basis of increase in these borrowings as shown in the balance sheet with doing any verification of evidences filed by the assessee. Similarly the First Appellate Authority has dismissed the appeal on hyper technica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss the AO has given specific finding as to defects in the books of accounts of the assessee justifying the disallowance. The case of the assessee is squarely covered by the decision of Hon ble Co-ordinate Bench of Kolkata in the case of Biswanath Agarwala [ 2018 (3) TMI 1517 - ITAT KOLKATA ] and in the case of Animesh Sadhu [ 2014 (11) TMI 1170 - ITAT KOLKATA ] for AY 2008-09 wherein the co-ordinate bench has held that no disallowance can be made for inability to do independent verification. The Co-ordinate Bench has also held that only specific expenditure which is unverifiable and unvouched could be disallowed. In the present case also the AO has failed to point out the particular expense which is un-vouched and unverifiable and there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter referred to as the Act). 6. Facts in brief are that during the course of assessment proceedings, the AO observed from the annual audited accounts that the assessee has long term borrowing at Rs. 1,13,88,854/- as on 31.3.2015 vis- -vis Rs. 62,87,757/- as on 31.03.2014. The AO further noted that the short term borrowing has also increased from Rs. 3,49,94,572/- to Rs. 3,75,21,122/- during the same period and thus overall increase in the borrowed funds was Rs. 76,27,649/-. Accordingly the AO called upon the assessee to explain the same, however the assessee did not respond to the notice or appear personally. Again a show cause notice No. 672 dated 8.12.2017 was issued to the assessee fixing the date of compliance on 15.12.2017 which aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the balance sheet note no. 3 and similarly short term borrowing from Bank of India in the form of cash credit was shown in note no. 3. We are of the considered view that the borrowings from NBFC, Bank can not be treated as unexplained cash credit u/s 68 of the Act which was done by the AO simply on the basis of increase in these borrowings as shown in the balance sheet with doing any verification of evidences filed by the assessee. Similarly the First Appellate Authority has dismissed the appeal on hyper technical ground of non-condoning the delay of 13 days which is against the principle of natural justice and fair play. Accordingly we set aside the order of Ld. CIT(A) and direct the AO to delete the addition of Rs. 76,27,649/- . 9. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e last year which is wrong and against the provisions of the Act. Under these circumstances, we find that the addition as made by the AO is unsustainable in law and accordingly we direct the AO to delete the disallowance by setting aside the order of Ld. CIT(A). 11. The issue raised in ground no. 7 is against the disallowance of 1% of lorry hire charges amounting to Rs. 18,63,232/- on an ad hoc basis. 12. Facts in brief are that the AO, on the basis of written submissions filed by the assessee and evidences therewith, observed that the assessee has shown freight income of Rs. 20,41,54,521/- as against lorry hire charges paid of Rs. 18,63,23,230/-. Finally the AO has made addition on the ground that the assessee has not cooperated in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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