TMI Blog2022 (10) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee s appeal. Unexplained unsecured loans - HELD THAT:- As found by the learned CIT(A), even the address and PAN of these loan creditors were not furnished by the assessee. The primary onus that lay on the assessee thus was not discharged by him as rightly held by the learned CIT(A). At the time of hearing before us, there is nothing brought on record to establish the identity and capacity of the concerned loan creditors and the genuineness of the relevant loan transactions. We, therefore, find no justifiable reason to interfere with the impugned order of the learned CIT(A) on this issue and upholding the same, we dismiss Ground No.3 of the assessee s appeal. Unexplained investment made by the assessee in gold ornaments - HELD THAT:- As observed that the investment made by the assessee in gold ornaments was duly recorded in the books of account of the assessee regularly maintained inasmuch as the same was duly reflected in the block of assets as noted by the authorities below. In our opinion, it therefore cannot be said that the source of the said investment, which was duly recorded in the books of account, had remained unexplained. Moreover, no deduction even on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rges under - Rs.2,81,54,400.00 Section 40(a)(ia) of the Act for the alleged failure of the assessee to deduct tax at source ii) Unexplained cash deposits found to be made - Rs. 55,33,807.00 in the bank accounts of the assessee iii) Unexplained unsecured loans - Rs. 8,55,310.00 iv) Unexplained investment in gold - Rs. 31,639.00 4. Against the order passed by the Assessing Officer under Section 143(3) of the Act, an appeal was filed by the assessee before the learned CIT(A) and after considering the submissions made by the assessee as well as the material available on record, the learned CIT(A) confirmed the disallowance made by the Assessing Officer on account of freight charges under Section 40(a)(ia) of the Act amounting to Rs.2,81,54,400/- as well as the addition made on account of unexplained investment in gold. As regards the additions made on account of unexplained cash deposits found to be made in the bank accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as the CIT(A) in this backdrop of facts conclude that there existed oral contract (s) between assessee and his payees u/s.194C of the Act. We find no reason to agree to such a conclusion. We observe that both the lower authorities have not demonstrated by way of a single documentary evidence revealing the payees concerned to have undertaken any risk involved in performing the transportation duty in question. Nor have they called any payee to depose in the same tune that the assessee had paid them in the capacity of a subcontractor. This tribunal s decision in ITA No.3536/Mum/2011 M/s. Bhail Bulk Carriers vs. ITO decided on 07.03.2012 deletes an identical disallowance on the same lines as under: 8. We have heard the parties at length and also gone through the findings of the authorities below and the case laws as have been referred in the appellate order as well as relied upon by the learned counsel. The relevant facts for adjudication of the issue are that the appellant is carrying out the business of transportation of oil through tankers. It entered into a contract with various companies (here mainly BPCL) for transporting the oils to various destinations as per the agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pping Corporation Ltd. (supra) also fortifies the case of the appellant. In this case the assessee which was a Tamil Nadu Government undertaking was engaged in the business of transportation of coal from the ports of Haldia, Visakhapatnam and Paradeep to Chennai and Tuticorin under contracts executed with the Tamil Nadu Electricity Board. The assessee owned three ships. Since three ships were not sufficient to carry out the contracts entered into with Tamil Nadu, the assessee hired ships belonging to other shipping companies and paid hire shipping charges for using the ships. The assessee, however, did not deducted tax under section 194C before the making payment of hire charges to the shipping companies. The Assessing Officer directed the assessee to pay tax u/s.201(1) and levied interest u/s.201(1A) on the ground that TDS should have been deducted u/s.194C of the Act. On the these facts, the Hon'ble High Court observed and held as under :- We heard the arguments of learned counsel. Under section 194C, the tax is to be deducted when a contract was entered into for carrying out any work in pursuance of a contract between the contractor and the entities mentioned in sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which would justify reading the Explanation as operating retrospectively, when the Explanation comes into force with effect from a future date. In this case, the Explanation introduced is with effect from July 1, 1995. Hence it will be applicable only for the future assessment orders and it will not be applicable to the assessment year in consideration. The Tribunal also considered the fact that the shipping companies which received the hire charges are also income-tax assessees and they had shown the hire charges in their respective income-tax returns and paid the taxes on the same. The said fact was also not disputed by the Revenue. So, we are of the view that the payment of hire charges for taking temporary possession of the ships by the assessee-company would not fall within the provision of section 194C and hence no tax is required to be deducted, and there is no error or infirmity in the order of the lower authorities. Hence, no substantial question of law arises for consideration of this court. Hence, we dismiss the above tax case. No costs. Consequently, the connected TCMP No. 1253 of 2005 is closed. 8.4 Thus in view of the findings given above and the law laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vident from the letter dated 8.11.2011 submitted by appellant to A.O. that a complete statement of bank account with bank book was submitted to A.O. The appellant has S.B. account No.08100120019760 and current account in the name of prop. concern M/s. Ideal Cotton Carrier with No.08102000005417 at Kotak Mahindra Bank. Both these banks account is disclosed bank account. Further, the appellant's books of accounts are subject to audit u/s.44AB of the Act and no adverse comments are mentioned by tax auditor in this regard. The verification of case record reflects that appellant filed a reconciliation of freight receipt and claim of TDS made from it as schedule TDS-2, As per this reconciliation the total freight receipt of Rs.2,16,14,344 is such that the payer deducted TDS out of it. The audited P L account reflect freight receipt of Rs.2,81,54,400 and commission income of Rs.9,62,500. It is therefore a huge sum of Rs.65,40,056 (2,81,54,400-2,16,14,344) was received by appellant. Considering the nature of appellant's business as that of transporter, it can very well be assumed that a sizable receipt out of it is received in cash. Further, the appellant made cash withdrawals from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal volume of the assessee s business, prevalent practice of making cash payments in the transportation business, higher net profit rate declared by the assessee etc., the learned CIT(A) held that the cash deposits found to be made in the bank account of the assessee with Kotak Mahindra Bank were duly explained. He also noted that there were substantial cash withdrawals made by the assessee from his bank account for which telescoping effect was required to be given. He further noted that there was not even a single instance pointed out by the assessee on verification of the cash book showing a negative cash balance at any point of time. The learned CIT(A), however, found that the bank account with ICICI Bank was not reflected in the books of account of the assessee. As noted by the Assessing Officer, the assessee also failed to give any details in respect of the said account and failed to furnish the source of cash deposits found to be made in the said bank account. He accordingly confirmed the addition made by the Assessing Officer on account of cash deposits found to be made in the said bank account amounting to Rs.15,93,081/- by treating the same as unexplained. At the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d simultaneously by same A.O. on same date u/s. 144 o the Act. In the case of other four parties, the loan accepted was of as follows: (i) Keyur Shah 14,89,000 (ii) Ashwin T Shah 3,12,000 (iii) Dipan Pharma Chem 4,36,000 (iv) Mulchandbhai Sons 1,00,000 23,37.000 Out of these four parties, loan taken from M/s. Dipan Pharma Chem Ltd and M/s. Mulchandbhai Sons were squared up while in other cases partly paid back. It is certified that in none of the case loan were accepted or repaid in cash by the tax auditor. It is therefore, only in the case of Shri Ashwin T Shah and Shri Keyur Shah, the loan can be treated as unexplained in the absence of address and PAN of both the parties. The total outstanding loan as on 31.3.2009 from these two parties are of Rs.3,12,000 and Rs.29,000 respectively. The other liability is of City bank loan with balance as on 31.3.2009 is of Rs.4,78,097. The loan from 'City Bank cannot be treated as unexplained. It is therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant in its letter dated 8.11.2011 at point No.3 mentioned that The assessee is not maintained personal account or personal balance sheet during above asstt.year. It is therefore, there is no detail as well as explanation of source of such purchase. Therefore the addition so made by A.O. is upheld and confirmed. The ground is dismissed. 8.1 After considering the rival submissions and perusing the relevant material available on record, it is observed that the investment made by the assessee in gold ornaments amounting to Rs.31,639/- was duly recorded in the books of account of the assessee regularly maintained inasmuch as the same was duly reflected in the block of assets as noted by the authorities below. In our opinion, it therefore cannot be said that the source of the said investment, which was duly recorded in the books of account, had remained unexplained. Moreover, no deduction even on account of depreciation was claimed by the assessee in respect of the investment made in gold ornaments and this being so, we are of the view that no addition can be made on account of gold ornaments even if the details and documents such as bills/vouchers are not produced by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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