TMI Blog2023 (2) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmations with regard to the purchases - HELD THAT:- CIT(A) after examination of the books of accounts, ledger statement, bank statement, bills vouchers submitted by the assessee has accepted the transactions after duly issuing notices u/s 133(6) to the parties and getting the details verified. Since, the action of the ld. CIT(A) is after due diligence exercised and the examination of the sundry creditor, we decline to interfere with the order of the ld. CIT(A). Notwithstanding that, we hold that the action of the AO disallowing only 25% of the total outstanding amounts without any rhyme and ratio cannot be supported. Disallowance of PF ESI - delay in payment of employee s contribution for PF ESI - HELD THAT:- As per the judgment of the Hon ble Supreme Court in the case of Checkmate Services P. Ltd. [ 2022 (10) TMI 617 - SUPREME COURT] the assessee cannot claim the amounts wherein there was delay in payment of employee s contribution for PF ESI. The AO may examine the months in which there has been a delay and bring through amount to tax accordingly. Addition u/s 68 - Unsecured Loan - HELD THAT:- Additional evidences filed by the assessee have been forwarded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Pvt. Ltd. was newly incorporated company and it had basic capital and borrowed funds from directors which formed its corpus, the same was available worth/funds of the company. The loan from the M/s Muah Retails Private Limited of Rs. 27,25,000/- was given out of the unsecured loan taken from Ms. Neeru Bhargava ,one of the director of the company who had taken loan of Rs, 65,00,000 from J K Bank and out of that money, Rs. 27,25,000/- was transferred to Muah Retails Private Limited. So, the creditworthiness was well established out of funds received from directors and later on, the same was given as the loan to the assessee. All the loans were given through the account payee cheques. 4. That the Learned ACIT has found that the confirmation of lender is available, credit worthiness and identities of parties are well established based on documents filed and examined by him also confirmed by the third party verification u/s 133(6) on the notice of AO and later CIT(A) recording that lender M/s Muah Retails Pvt. Ltd. received unsecured loan of Rs. 2725000/- from Ms. Neeru Bhargava/(director) in whose hand the source of funds was a personal loan of Rs. 65,00,000/- receipt from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Sundry Creditors for purchases Section 68 is not applicable unless purchases are rejected without appreciating the decision given by the Hon'ble jurisdictional High court in the case of PR. Commissioner of Income Tax, Delhi-17 v. M/s Wadhawan Designs ITA No. 66/2018 wherein it has been held that the burden in the first instance to prove that the amounts were duly paid to the suppliers, in the course of regular commercial transaction, by establishing the identity of the recipients, genuineness of the transaction and the creditworthiness of the party concerned lies with the assessee. 4. On the facts and circumstances of the case, the ld. CIT(A) erred in allowing relief of Rs.8,90,170/- by holding that these payments (employees' contributions to EPF ESIC) were made by the assessee before tiling of return and he relied on the judgment of jurisdictional High Court given in ease of CIT v. AIMIL Ltd. without appreciating the judgments given by the Hon'ble High Courts in cases of M/s. Unifac Management Services (India) Pvt. Ltd. v. Deputy Commissioner of income Tax, Corporation Circle 3(2), W.P. No. 5264 of 20 1 8 (Madras), Commissioner of Income Tax-II v. Gujara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd surplus which could have enabled this sister concern to grant the unsecured loan. 8. After hearing the arguments of both the parties and perusing the material available on record, we find that the documents submitted by the assessee provides that the lender M/s Muah Retails Pvt. Ltd. received the unsecured loan of Rs.27,25,000/- from Ms. Neeru Bhargav, one of the Directors of the M/s.Muah Retails Pvt. Ltd. in whose hand, the source of this fund was a personal loan of Rs.65,00,000/- received from J K Bank. In the given facts and circumstances, there is evidence of identity of the lender , genuiness of the transaction, the creditworthiness is satisfied and therefore, the impugned loan amount of Rs.27,25,000/- can be held to be genuine. The sequence of events reveal that the assessee received loan from M/s. Muah Retails Pvt. Ltd. which is a sister concern who in turn received funds from the Director Ms. Neeru, who was financed the same as personal loan by J K bank. Hence, the addition made by the AO and confirmed by the Ld.CIT(A) is here by directed to be deleted. A.Y. 2013-14 (Revenue Appeal) Trade Payables: 9. The AO made addition on account of dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visory Pvt. Ltd. The ld. CIT(A) deleted the addition. Since, the order of the ld. CIT(A) is based on the remand report of the AO, we decline to interfere with the order of the ld. CIT(A). A.Y. 2014-15 Sundry Creditors: 14. During the assessment proceedings, the AO issued notices u/s 133(6) to various parties of fabrication manufacturing expenses. Owing to non-reply of notices and in the absence of confirmations, the AO disallowed the amount on account of sundry creditors and brought the same to tax. 15. During the proceedings before the ld. CIT(A), the assessee submitted details of ledger account copy, bank statements, bills, challans, confirmations, TDS details, balance sheets and ITR of the party. The ld. CIT(A) called for a remand report vide letter dated F.No. /CIT(A)-09/Remand Report/2017-18/1179 dated 12.02.2018. The AO submitted that the confirmations/details have been test checked and found satisfactorily. Based on the remand report of the AO, the ld. CIT(A) deleted the addition. Since, the action of the ld. CIT(A) is based on the remand report of the Assessing Officer, we decline to interfere with the order of the ld. CIT(A). In the result, the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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