TMI Blog2016 (3) TMI 1475X X X X Extracts X X X X X X X X Extracts X X X X ..... der of learned CIT(A) and accordingly reject ground No. 2 of the Revenue. Disallowance of expenses - expenses not wholly necessarily and exclusively related to own business - CIT(A) deleted addition - HELD THAT:- CIT(A) has examined each and every item of expense in detail and the disallowance was deleted by him on the basis of his categorical finding that all the expenses are fully, necessarily and exclusively related to assessee s business and the same are allowable expenses except small portion which is already disallowed by him and these findings of CIT(A) could not be controverted by Learned D. R. of the Revenue. Hence, we find no reason to interfere in the order of CIT(A). Appeal of the Revenue stands dismissed. - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER For The Appellant : Shri Amit Nigam, D. R. For The Respondent : Shri Rakesh Garg, Advocate ORDER PER A. K. GARODIA, A.M. This is Revenue s appeal directed against the order passed by learned CIT(A)-II, Kanpur dated 27/03/2014 for the assessment year 2009- 10. 2. In this appeal, the Revenue has raised the following grounds: 1. Ld. Commissioner of Income Tax (A)-II, Kanpur has erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .O. In remand report the A.O. has expressed doubt about the genuineness / creditworthiness of the creditor but this is not tenable in view of the facts that no loan has been received during previous year relevant to AY 2009-10 and also in consideration of the loans in regular assessment proceedings in AY 2002-03/2003-04/2004-05/2005-06. The explanation of the appellant in the matter of different signature of Sri Mohan Lal at the affidavit and receipt of notice is found satisfactory. The appellant has also furnished the PAN (AERPK5498M) of Meena Kesarwani which is confirmed from site of NSDL. The explanation of the appellant with regard to above 18 cash credit accounts is found satisfactory. Besides this, I also agree with the contention of the appellant that on the basis of genuineness /creditworthiness etc. relating to loans received prior to previous year relevant to A.Y. 2009-2010 no addition can be made in A.Y. 2009-10, As held by Hon'ble Delhi High Court in CIT vs. Usha Stud Agricultural Farms Limited - 2008-301 ITR 384 and by Hon'ble Rajasthan High Court in CIT vs. Prameshwar Bohra - (2007) - 301 ITR 404. The addition of ₹ 76,58,226/-. Is hereby deleted. 4.1 Fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Smt. Priya Raheja is duly confirmed by her. In the facts of the case there is nothing to attract provision u/s 41(1) of the Income Tax Act. In view of these facts the additions made of ₹ 32,82,000/- is hereby deleted. 5.1 From the above para from the order of CIT(A), it can be seen that a categorical finding has been given by CIT(A) that there is nothing to attract the provisions of section 41(1) of the Act. He has also given a finding that regarding the amount of ₹ 12.51 lac in respect of credit in the case of Shri Ajay Kumar Gupta, the amount was advanced by the assessee in the month of September to November 2006 for purchase of land from his personal account but Shri Ajay Kumar Gupta returned this money in May, 2008 and the proceeds were deposited in the proprietorship business concern of the assessee M/s Kamal Kumar Dinesh Kumar and the same was appearing in the as sundry creditors in the books of that concern. Under these facts, it cannot be said that there is any liability which has ceased to exist. Same is the fact in the case of the liability of ₹ 17.51 lac appearing in the name of Shri Dinesh Kumar Gupta as noted by CIT(A) in the above para of his orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it Fee. The disallowance made in this regard is hereby deleted. Regarding advertisement it is submitted by the appellant that the public notices were got published in the local News Paper - Jagran Prakashan. All payments were made by account payee cheques directly to the Jagran Prakashan for the purpose. It is further submitted that appellant have duly shown lawn income of ₹ 8,50,000/- duly credited in Profit Loss Account. To protect his interest in property, he has to issue Public Notices and. The expenses have been paid through cheque to M/s. Jagran Prakashan Limited. The expense is fully relatable to our lawn income and is deductible expense as claimed. I find that the appellant has offered lawn income of ₹ 8,50,000/- shown in the audited Profit Loss account. The payments are through cheques towards public notices published in local News Paper - Jagran. The expenses incurred have been claimed to protect his interest in property which is generating income. This expense is directly related with the income and is allowable expense in computation of income. The disallowance made in this regard is hereby deleted. Regarding bank charges it is submitted by the appellant tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own by me is relating to lawn at property no. 7/87 Tilak Nagar, Kanpur. To protect my interest in property I had to avail services of advocates. The expense related to my income, and is fully allowable as claimed. In allowing advertisement expenses I have held that this expense is directly related with the income and is allowable expense in computation of income. For the same reason the disallowance made in this regard is hereby deleted. Regarding loading expenses it is submitted that the expenses are related with loading of goods. This is in the nature of palledars charges paid to workers. In remand report the A.O. has observed that there are no proper bills / vouchers which could substantiate the claim of the assessee beyond doubt. It is further noticed that the expenses have been booked mechanically @ ₹ 0.25 per kg of load which is not a practice followed in such type of expenses (i.e. palledari). In this regard the appellant has submitted that these expenses are paid to the palledars in cash. The palledaries are paid as settled at the rate of Re.0.25 per kg. The expense is fully relatable to the loading of goods. This is neither mechanical nor out of practice. The Ld. A.O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - (Rs. 2,994/-, 7500/- and 1100/-) are appears to be related with Car. The disallowance is restricted to ₹ 5,000/-. Regarding Salary ₹ 1,71,000/-, it is submitted that the expenses are in the nature of regular employment of staff for business purposes. In remand report it is observed by the A.O. that it is not verifiable from the details submitted by the assessee that these expenses were fully and exclusively for business purposes. The appellant has submitted to have furnished the details of person along with services rendered to whom salary have been paid. It was further submitted that appellant has godown at Panki, head office at Tilak Nagar. The expenses are less then ₹ 50,000/- per month. I have considered the facts of the case. The payment to Sri Amit Arora and Sri Anurag Mishra have been paid in cash on regular basis. Sri Amit Arora have been claimed to maintain account and Sri Anurag Mishra is looking after other business affairs. The payment to Sachidanand Drivedi and Kishan Kumar Basodia have been paid by cheque. Who were employed for part of the year. The business places have at Tilak Nagar and Panki. The business require complying with Sales Tax, Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning and Maintenance ₹ 2,15,957.99 it is submitted that the office situate at Shakkar Patti, Godown situate at Panki Industrial Area. There is regular requirement in the business to visit office, godown, banks and to our customers, service providers, Income Tax, Vat Tax, Counsels, to the court and Civil Counsels etc. etc.. The purchase of fuel (petrol) for car is debited under this head. Except ₹ 1007- all expenses have been paid through cheques to M/s. Sri Ram Motors (petrol pump) against purchase of fuel. In remand report A.O. has observed s the user of above referred fuel and lubricants for the personal user can not be rules out in absence of any concrete evidence in support of its user for business purposes only. I have seen the details of expenses and considered the facts. The personal use of vehicles cannot be rules out and it is estimated at ₹ 50,000/-. The disallowance is restricted to ₹ 50,000/-. Regarding Brokerage Expenses ₹ 1,44,735.29, DP Charges ₹ 1754.29 and Security Transaction tax ₹ 33,890/- it is submitted by the appellant that these expenses are related with share transactions. Brokerage have been paid to -IL FS Invest Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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