TMI Blog2022 (11) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... funds of the assessee company, secondly, whether Shri Rajeev Agarwal, Jugal Kishore Agrawal, Anil Kumar Agarwal Sanjay Agrawal are the Directors of the assessee company. In case, the assessee is able substantiate the above two aspects, Ld. CIT(Appeals) may allow the appeal of the assessee in light of several Rulings highlighted above.Grounds No.1 of the assessee s Appeal is allowed for statistical purposes. Unreconciled creditor - Difference in total credit amount as per the assessee s books of accounts and the amount confirmed by the creditor in response to notice under section 133(6) - HELD THAT:- The entire amount has been paid back to the creditor by way of account payee cheque i.e. through appropriate banking channels. The counsel for the assessee submitted that the assessee cannot be held responsible for any discrepancy/mistake committed by the creditor in its accounts. We are in agreement with the contention of the counsel of the assessee that the AO/CIT have not disputed that the entire amount of has been returned back to the creditor after deduction of taxes, through banking channels - the assessee is not liable to explain any accounting discrepancy made by the cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(1)(c) of the Act. 3. The assessee has taken primarily three grounds of appeal, which shall be taken up individually in the succeeding paragraphs. Ground number 1: Disallowance of depreciation of ₹ 11,39,632/- 4. The brief facts in relation to this ground of appeal are that during the course of assessment proceedings, the AO observed that certain assets (vehicles) were purchased on which assessee had to claim depreciation which were not held in the name of the assessee company. Accordingly, the AO disallowed the depreciation claimed by the assessee on such assets on the basis that the assessee company could not submit any proof in respect of the claim that the dominion over the said assets vested with assessee company and the assets under consideration were indeed used for the purpose of the assessee s business. In the instant case, the AO held that not only were the assets not in the name of the assessee company, but also no proof or evidence have been submitted to substantiate the claim that the dominion over the assets were with the assessee company and the assets were used for the business of the assessee. Accordingly, the AO relied on this case of Mysore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specific to the vehicle in the.name of the directors but in our case it is not so. Therefore the AO's action for making the disallowance of the insurance expenses and depreciation is correct and justified and the ground of the appellant is dismissed. 6. Before us, the counsel for the assessee submitted that the CIT failed to appreciate the fact that the vehicles were used wholly and exclusively for the purpose of assessee s business and the assessee company had dominion over the vehicle. He further submitted that the assets were purchased in the name of the Directors of the assessee company and it is a well-settled law that in the case of a company, even if the assets were purchased in the name of the directors of the company, if they are used wholly and exclusively for the purpose of business of the assessee company, depreciation and other related expenses can be claimed by the company. The counsel for the assessee further submitted that the assets purchases were reflected in the balance sheet of the assessee and its maintenance and petrol-diesel expenses were borne by the assessee company and the same have been debited in the profit and loss account. He further submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. In the result, Grounds No.1 of the assessee s Appeal is allowed for statistical purposes. Ground number 2: Unreconciled creditor ₹ 6,52,296/- 9. The brief facts in relation to this ground of appeal are that the AO observed that in case of one creditor M/s Ambika Construction, the total credit amount as per the assessee s books of accounts was ₹ 96,31,203/- whereas the amount confirmed by the creditor in response to notice under section 133(6) of the Act was ₹ 89, 78, 907/- only. The assessee submitted that TDS was deducted on the total amount of ₹ 96,31,203/- and payment was made through cheque. Further the creditor had claimed TDS credit of the entire amount during the year under consideration. However, the AO held that the assessee has not been able to reconcile the difference and accordingly added back an amount of ₹ 6,52,296/-to the total income of the assessee. 10. In appeal, Ld. CIT(Appeals) dismissed the appeal of the assessee with the following observations: 4.3. I have considered the facts of the case and submission made by the appellant. The AO has made the addition of Rs.6,52,296/- on account of difference in. the balan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplained. When the appellant has credited this amount in the year under consideration. Therefore, appellant's contention is not verifiable and supported with the details submitted. Hence, the addition made by the A.O. is justified and same is confirmed. 11. Before us, the counsel for the assessee reiterated the submissions made before the AO and Ld. CIT(Appeals) to the effect that the difference is on account of accounting mistake made on the part of the creditor. The difference is owing to the fact that they have shown the receipt in the next year. The counsel for the assessee submitted that the creditor is the subcontractor of the assessee and he should have booked the income in this year itself. The assessee has deducted TDS on the entire payment and the creditor has also claimed credit in respect of the same. Accordingly, the assessee cannot be penalised for the accounting error committed by its creditor. The counsel for the assessee submitted that the reason why the creditor M/s Ambika Construction credited the amount in the next year is not known to the assessee and the same is not under the control of the assessee. However, it is an undisputed fact that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich no TDS was deducted and therefore the assessing officer also disallowed the above payments u/s 40(a)(ia) of the Act of the Act. 16. In appeal, Ld. CIT(Appeals) dismissed the assessee s appeal on the ground that the assessee has not been able to give any explanation for non- deduction of TDS and no details of expenses were submitted by the assessee during the course of appellate proceedings. 17. The assessee is in appeal before us against the aforesaid addition ₹ 1,15,714/- confirmed by Ld. CIT(Appeals) towards carting expenses. Before us, the counsel for the assessee submitted that admittedly that no TDS has been deducted on the aforesaid payment. Further, no additional supporting documents have also been furnished to the effect that the payee has reflected the above income in the return of income and paid taxes thereon, and accordingly, the assessee is not an assessee default. In view of the facts, we are of the considered view, that the Ld. CIT(Appeals) has not erred in facts and in law in confirming the disallowance of ₹ 1,15,714/- made by the Ld. Assessing Officer. 18. In the result, this ground of the assessee s appeal is dismissed. 19. In the combi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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