TMI Blog2023 (11) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the hands of the assessee is deleted. Addition u/s 37 - disallowance of claimed Employee Benefit Expenses, other expenses and Finance Cost - HELD THAT:- We find the grievance of the assessee to be justified despite the fact that the assessee did not carry out any business activity during the year, the fact remains that the was in existence during the year. It is also undisputed that the expenditure in question was incurred as normal expenditure during the year. That the salary of the Accountant and Peon had to be paid. The running and maintenance expenses, audit fees and ROC fees were also a necessary concomitant. Thus, the Employee Benefit Expenses and other expenses are allowed and the addition in this regard is deleted. However, no details of finance cost having been furnished, the addition to this extent, as confirmed by the ld. CIT(A), is upheld. - Shri A.D. Jain, Vice President And Shri Vikram Singh Yadav, Accountant Member For the Assessee : Shri Nikhil Goyal, Advocate And Shri Ashok Goyal, C.A. For the Revenue : Shri Dharamvir, JCIT, Sr.DR ORDER PER A.D.JAIN, VICE PRESIDENT This is assessee's appeal for assessment year 2018-19 ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ITRs and PAN, despite Shri Sunny Garg being the Director of the company; that in the absence of these documents, the credit worthiness of the transaction could not be proved; that the assessee had stated that the transaction had been done through banking channel and they were financed by Shri sunny Garg through various sources; that this did not prove the identity, credit worthiness of the creditor and the genuineness of the transaction, in the absence of PAN and copies of ITRs. The AO placed reliance on various decisions in this regard. It was further observed by the AO that the assessee's contention that the Department had accepted such practice in some other cases also could not be a good ground for consideration, as the facts and circumstances of every case are different and each and every case as well as assessment year has to be analyzed separately. The AO, thus, held that the assessee had failed to establish the identity and credit worthiness as well as genuineness of the transaction in respect of the claimed unsecured loan of Rs. 16,97,000/-. This amount was, therefore, treated as unexplained credits in the books of account of the assessee and it was added to the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been submitted that also, proceedings against Shri Sunny Garg were concluded by the AO after the passing of the CIT(A) s order in the assessee's case. 7. It has also been submitted that the PAN and Bank Statement of Shri Sunny Garg had been filed before the AO alongwith the reply filed on 22.02.2021, in response to the notice issued u/s 142(1) of the Act, to prove the identify and credit worthiness of the lender and the genuineness of the transaction. Attention, in this regard, has been drawn to the bank statement, which is at APB-1, page 52. It has been submitted that as such the assessee's onus u/s 68 of the Act was duly discharged and it stood shifted to the AO, but was not discharged by the AO. 8. It has further been contended that the income stands assessed by the AO in the hands of the Director, Shri Sunny Garg, as available from the assessment order dated 30.05.2023; and that so, addition of the same amount cannot be made in the hands of the assessee. Attention has been drawn to the assessment order for assessment year 2018-19, in the case of Shri Sunny Garg. It has been stated that when the income of Shri Sunny Garg, Director, Director of the assessee company, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yee Benefit Expenses of Rs. 2,15,000/-, the AO asked the assessee to furnish the details of all the expenses debited by the assessee during the period under consideration, alongwith their copy of account, mode and source of payments with complete supporting evidences, in absence of which, the assessee was asked to show cause why the expenses claimed, despite neither doing any business, nor earning any revenue during the year, be not added back to the assessee's income. 14. In response, the assessee submitted that this amount belonged to salary of Accountant and Peon and such expenses could not be ignored if the assessee had not done any business. 15. The AO observed that, however, no details of employees, source and mode of payments and any documentary evidence had been provided by the assessee in support of its claim. The AO, accordingly, disallowed the claim of Rs. 2,15,000/- and added it back to the assessee's total income, as being expenses not supported by any details and evidences. 16. Concerning the other expenses of Rs. 2,99,120/-, the AO observed that the Profit Loss Account of the assessee showed that the assessee had claimed such expenses therein. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to show cause as to why, despite neither doing any business, nor earning any revenue during the year, the expenses claimed should not be added back to the assessee's income. 20. In response, the assessee stated that it had itself disallowed an amount of Rs. 6,04,325/-. 21. The AO made addition of the remaining amount of Rs. 2462/- , disallowing the same, as being expenses not supported by any documentary evidence, or justification. 22. The ld. CIT(A) upheld the addition of Rs. 5,16,582/-, holding that the claim of the expenses remained unsubstantiated; that the onus was on the assessee to furnish necessary details in support of the expenses claimed, as per the provisions of Section 37 of the Act, and that such onus had not been discharged. 23. The ld. Counsel for the assessee has submitted that during the assessment proceedings, it was contended before the AO that the expenses were incurred on the salary of the Accountant and Peon, running and maintenance; audit fees and ROC fees; that the AO had disallowed other expenses of Rs. 2,99,120/-, Employee Benefit Expenses of Rs. 2,15,000/- and Finance Cost of Rs. 2462/-; that the expenses incurred by the assessee during t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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