TMI Blog2022 (10) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Commissioner (Appeals) on the issue. Ground raised is dismissed. Addition u/s 68 - undisclosed sundry creditors - HELD THAT:- Merely because these evidences were not produced in course of assessment proceedings, AO has stated that such evidences should not be accepted and additions made should be confirmed. To say the least, the observations of the AO are self-contradictory. On one hand, he accepts that assessee s contention regarding genuineness of sundry creditors appears to be correct, whereas, on the other hand, he terms assessee s claim to be afterthought. This, in our view, is unacceptable. When the assessing officer has not found anything adverse in the evidences furnished by the assessee and accepted assessee s claim to be correct, he cannot again reject the claim of the assessee on flimsy ground. AO cannot blow hood and cold at the same time. Addition being expenditure incurred towards distribution of free samples to players - HELD THAT:- As it may not be always possible for the assessee to keep supporting evidence, considering the fact that at times, assessee is providing free samples to national/international level players of repute and considered as cel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find any reason to interfere with the decision of learned Commissioner (Appeals) on the issue. Ground raised is dismissed. - ITA No. 3777/Del/2016 C.O. No. 290/Del/2016 (In ITA No.3777/Del/2016) - - - Dated:- 4-10-2022 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND DR. BRR KUMAR, ACCOUNTANT MEMBER Assessee by : S/Shri K.Sampth V. Rajkumar, Adv. Department by : Shri T. Kipgen, CIT DR ORDER PER SAKTIJIT DEY , JUDICIAL MEMBER : Captioned appeal by the Revenue and cross-objection of the assessee arise out of order dated 28.03.2016 of learned Commissioner of Income-Tax (Appeals), Meerut for the assessment year 2011-12. ITA No. 3777/Del/2016: 2. Ground nos. 6 7 raised by the department being general in nature are dismissed. 3. In ground no.1, Revenue has challenged deletion of addition of Rs.4,20,326 representing disallowance of proportionate interest on interest free advances. 4. Briefly, the facts are, assessee is a resident partnership firm engaged in manufacturing of support goods. For the assessment year under dispute, assessee had filed its return of income on 30.09.2011 declaring total income of Rs.98,53,078. 5. In course of assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vinod Sareen 2,60,000 6. Loan to Anisha Sareen 20,05,648 Total 35,02,720 10. As could be seen from the factual aspect analyzed by learned Commissioner (Appeals), the amount of Rs.7,37,035 were given to players for endorsement of assessee s products/goods and there is advances given to an agent. The payment of Rs. 1,00,000 to an advocate is for attending to various legal matters concerning the assessee. Payments made to JVS Sporting and Sunridges Sporting are for the purpose of payment of taxes on their behalf as they are sister concerns of the assessee and have running accounts. As regards, the advance to Shri Vinod Sareen, it is observed, he is an old and dependable employee of the assessee to whom advance is given at the time of need. 11. As regards, the alleged advance to Anisa Sareen, after examining the reconciliation statement filed by the assessee, learned Commissioner (Appeals) has given a factual finding that actually there was no such advance given to the concerned person. The aforesaid finding of fact recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rect. However, merely because these evidences were not produced in course of assessment proceedings, the assessing officer has stated that such evidences should not be accepted and additions made should be confirmed. To say the least, the observations of the assessing officer are self-contradictory. On one hand, he accepts that assessee s contention regarding genuineness of sundry creditors appears to be correct, whereas, on the other hand, he terms assessee s claim to be afterthought. This, in our view, is unacceptable. When the assessing officer has not found anything adverse in the evidences furnished by the assessee and accepted assessee s claim to be correct, he cannot again reject the claim of the assessee on flimsy ground. The assessing officer cannot blow hood and cold at the same time. 18. In view of the aforesaid, we uphold the decision of learned Commissioner (Appeals) by dismissing the ground raised. 19. In ground no. 3, Revenue has challenged deletion of addition of Rs.68,12,500 representing expenditure incurred towards distribution of free samples to players. 20. Briefly, the facts are, in course of assessment proceedings, the assessing officer noticed that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has shown unsecured loan of Rs.24,23,903 in the balance sheet. On examining the account of assessee, the assessing officer noticed that credit balance of Rs.20,05,648 has been shown in case of Anisha Sareen, whereas, as per the audited balance sheet, the same appears as a negative balance. When called upon to explain, the difference, though, the assessee furnished its submission, however, it was not acceptable to the assessing officer. Accordingly, he added an amount of Rs.34,26,614 to the income of the assessee. 27. However, beng convinced with the explanation of the assessee, learned Commissioner (Appeals) deleted the addition. 28. We have considered rival submissions and perused material on record. 29. As could be seen, before the assessing officer the assessee explained that there was old unsecured loan of Rs.58,50,517 in the name of Anisha Sareen which continued and no further addition/repayment was made during the year. However, considering the fact that in the audited balance sheet outstanding balance of Rs.24,23,903 was shown, the assessing officer has added back an amount of Rs.34,26,614. In the remand report filed by the assessing officer in course of first app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition which, therefore, remains is commission to partners amounting to Rs.3,68,305. As righty observed by learned Commissioner (Appeals), commission paid to partners is not covered under Section 194H of the Act as there is no employer and employee or principal agent relationship between the partners and the firm. Thus, we do not find any reason to interfere with the decision of learned Commissioner (Appeals) on the issue. Ground raised is dismissed. 37. In the result, the appeal is dismissed. C.O. No. 290/Del/2016: 38. The only effective ground raised by the assessee relates to disallowance of 10% out of the free samples given to players. While deciding corresponding issue raised in groaund no. 3 of Revenue s appeal in ITA No.3777/Del/2016 in the earlier part of the order, we have upheld the addition of learned Commissioner (Appeals) on the issue. Thus, this ground of the assessee has become infructuous. 39. The other grounds raised by the assessee are merely in support of the order passed by learned Commissioner (Appeals). 40. In view of the aforesaid, cross-objection is dismissed. 41. To sum up, both the appeal and cross-objection are dismissed. Order pron ..... X X X X Extracts X X X X X X X X Extracts X X X X
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