TMI Blog2022 (8) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... before Ld. CIT (A) and accepted by him considering the remand report of A.O., we are of the considered view that order of A.O. was not sustainable and findings of Ld. CIT (A). Addition as cash receipts and cash payment - HELD THAT:- We have gone through the form no 3CD (Tax Audit Report) and submissions before the authorities below made by the assessee. We found the tax auditor reported these two items of cash receipt and cash payment shown under the column of loan and deposits accepted during the year and not under the column for disallowances to be made u/s 40A(3). These two transactions are in the nature of amounts taken / paid in cash from sister /associate concerns. As assessee has not claimed amount of Rs. 19,50,000/- and Rs. 56,00,000/- as expense in its Profit Loss A/c, therefore, it cannot be disallowed. Looking at the nature of transactions it is no-where proved that the same can be treated as income u/s 28 or can be disallowed u/s 40A(3) or any other section of the act. At the max both the transactions can be considered for the purposes of section 269SS and section 269T, subject to the clarification of the assessee and various judicial pronouncement in this reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wages are being paid or purchases are to be made in mofussil area or in case of accident etc., large cash amount is required. 2. The Hon. Commissioner of Income Tax (A) has erred on facts and in law overlooking several judicial pronouncements upholding the payment in cash. Considering the business necessities. The cash amounts were transferred only for the business exigencies of the company and not for personal use. Moreover, there is neither any doubt nor allegation with regard to genuineness of transaction at the assessment or appellate level. 3. The Hon. Commissioner of Income Tax (A) has erred on facts and in law disregarding the fact that this was not case of unexplained cash receipts/payments, but the transactions are duly recorded in the Payers/Receiver's books and disclosed. The same were reported in the Financial Statements of all concerned entities for all these years, where the management and ownership are common/same and nowhere/never adverse view was taken by the Assessing authorities all these years. 4. The Hon. Commissioner of Income Tax(A) has erred on facts and in law in ignoring ground realities that the appellant do not have any holiday and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of sundry creditors for expenses amounting to Rs 30246494/-. She further made additions of Rs 7550000/- on account of cash receipts and payments over Rs 20000/-. 5. Aggrieved with this order assessee preferred an appeal before Ld. CIT (A)-22 Mumbai. The Ld. CIT (A) observed as under against the findings of A.O. I have considered the facts of the case and submissions made by the appellant. The AO has added 20% of the outstanding balance as on 31.03.2012 on account of the same being unverifiable. The other reason for this addition that the AO noted that there is a difference in the opening balance of Sundry Creditors for Expenses as on 31.03.2011 in the details submitted by the appellant and the Balance Sheet and accordingly she has held that the Balance Sheet does not reflect a true and correct picture of its affairs. As regards this difference, the appellant has submitted that the details filed before the AO were list of parties that had an outstanding balance at the end of the year and did not include those accounts that were squared off during the year and brought forward from earlier years. It was stated that the AO did not ask for this reconciliation and straig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- being 20% of outstanding balance of Sundry Creditors for Expenditure cannot be sustained and the entire addition of Rs.4,14,87,861/- done by the AO on estimate basis is deleted. This ground of appeal is therefore allowed. 6. The findings of Ld. CIT (A) as mentioned supra, were made with reference to the disallowances discussed supra and the findings of A.O where she justified these additions on account of following issues/deficiencies she found during the assessment proceedings as under: i) Non filing of confirmations of the sundry creditors for purchases ii) Discrepancies in the opening balance as per balance sheet and submissions made by the assessee iii) Balance sheet of the assessee doesn t reflect a true and fair view of its affairs. iv) Notices issued u/s 133(6) were not responded by the parties. 7. We have gone through the order of the A.O., order of the Ld. CIT (A) and submissions of the assessee along with paper -book filed. We have considered the remand report sent to the office of Ld. CIT (A) by the office of A.O. also. Deficiencies marked by the AO are not sustainable (i) As assessee had filed confirmations of sundry creditors for purchases (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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