TMI Blog2024 (5) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... rative expenses debited by the assessee is hardly Rs. 58.64 lakhs. Hence, we have no hesitation to delete the entire disallowance of expenses debited in the P L A/c. - Decided in favour of assessee. Disallowance of interest paid on unsecured loans - HELD THAT:- No addition has been made by the learned AO for the receipt of unsecured loans - unsecured loans received by the assessee have been accepted as genuine by the learned AO. Assessee had duly furnished the confirmations from the unsecured loan creditors, which fact is also confirmed by the CIT(A) in his order. It is not the case of the Revenue that the said loans were not utilized by the assessee for the purpose of his business. Absent such findings, interest paid on unsecured loans which were considered as genuine, cannot be subjected to any disallowance. Hence, we direct the Ld. AO to grant deduction for interest - ground raised by the assessee is allowed. Disallowance on account of difference in purchases debited by the assessee vis a vis corresponding value shown by the suppliers in their response to notice issued u/s 133(6) - HELD THAT:- Though there are certain differences in terms of accounting policies/ deficiencies car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the year under consideration, the assessee has debited expenses to Rs 1,22,50,949/- and earned a net profit of Rs. 8,11,963/. and gross profit of Rs 66 ,76,736/-. During the course of reassessment proceedings, the assessee was asked to provide justification for the expenses incurred and debited to Profit Loss A/c. Thereafter, the assessee filed detailed replies and also submitted the following documents in order to justify the expenses incurred by him:- i. Month wise details of expenses incurred ii. Details of salary paid iii. Details of unsecured loans iv. Copy of confirmations of parties from whom unsecured loans were obtained and interest on such loans was provided v. A copy of ITRs of such lenders of unsecured loans 4.1 However, ignoring the replies and documents furnished by the assessee during the course of reassessment proceedings, Ld. AO vide order dated 31.12.2017 made a disallowance of expenditure amounting to Rs. 58,64,773/- alleging that the assessee has not provided proof of expenditures debited to Profit Loss A/c. Aggrieved by the order of the Ld. AO, assessee filed an appeal before the CIT(A). 4.2 During the course of appellate proceedings, the assessee submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Expenses- Rs. 12,86,464/- 4.4 Aggrieved by the order of CIT(A), the assessee has filed an appeal before the Tribunal. It is pertinent to note here that the assessee has maintained complete books of accounts which were duly audited by a Chartered Accountant and were submitted to the Ld. AO during the course of re-assessment proceedings. Further, no specific irregularity or error has been pointed out by the Ld. AO in the books of accounts submitted by the assessee. Also, the assessee has submitted detailed documents and explanations to justify the expenses incurred for the purposes of the business and no defect or discrepancy has been pointed out in the details furnished by the assessee. On perusal of various pages of the paper book, which are also listed hereinabove, we find that the observations made by the learned AO in para 2 of the assessment order that no details were furnished by the assessee, are factually incorrect. This fact was not controverted by the Revenue before us as it is glaring on us. Despite submission of various details, as listed supra, the learned CIT(A) had sustained the disallowance for some of the expenditures either in full or on ad hoc basis after granting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esponse to notice issued u/s 133(6) of the Act. 6.1. We have heard rival submissions and perused the materials available on record. During the course of reassessment proceedings, in order to verify the genuineness of the purchases made by the assessee, the Ld. AO called for information from various parties under section 133(6) of the Act. Out of various parties from whom the purchases have been made by the assessee, the Ld. AO disallowed purchases to the extent of Rs. 3,25,95,920/- made from two parties namely Thiru Arooran Sugar Ltd and Dwarikesh Sugar Industries Ltd as under:- S. No. Purchases from As debited to Trading A/c As confirmed by party Difference 1. Thiru Arooran Sugar Ltd. 12,34,96,604 9,14,42,559 3,20,54,045 2. Dwarikesh Sugar Industries Ltd. 15,62,28,204 15,56,86,329 5,41,875 TOTAL 3,25,95,920 6.2. To explain the above difference, the assessee submitted a reconciliation of the purchases vide letter dated 31.12.2017 enclosed in Page 113 of the Paper Book. The assessee explained that the difference of Rs. 3,20,54,045/- with regard to purchases made from Thiru Arooran Sugar Ltd. is on account of different accounting treatment of freight and loading unloading expenses by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : Purchase made by the assessee vide invoice no. TASLACR/ 165/2009 dated 31.10.2009 from M/s Thiru Arooran Sugar Ltd. which was recorded by M/s Thiru Arooran Sugar Ltd. in the name of M/s Subham Sugar Agency Ltd., Kolkata instead of assessee 2,52,51,165. 45/- Less: Freight Charges paid by the assessee to M/s Thiru Arooran Sugar Ltd. vide Debit Note No. 165 dated 31.10.2009 issued by M/s Thiru Arooran Sugar Ltd. against above mentioned invoice No. TASL-ACR/165/2009 dated 31.10.2009 which was recorded by M/s Thiru Arooran Sugar Ltd. in the name of M/s Subham Sugar Agency Ltd., Kolkata instead of 1,55,887. 55/- Less: Railway Freight paid by the assessee to to M/s Thiru Arooran Sugar Ltd. which was recorded by M/s Thiru Arooran Sugar Ltd. in the name of M/s Subham Sugar Agency Ltd. Kolkata instead of assessee 13,05,137/- Sales recorded by M/s Thiru Arooran Sugar Ltd. (bifurcation of the said amount is highlighted in the ledger account of the assessee in the books of M/s Thiru Arooran Sugar Ltd. 9,69,58,853.59/- 6.5 The assessee has further submitted that the difference between Rs. 9,69,58,853/- as mentioned above and Rs. 9,14,42,559/- is on account of railway freight and debit note wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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