9911796707
TMI Blog2025 (5) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... . The appellate order u/s 250 of the Act of Commissioner of Income Tax (Appeals)/ NFAC dt. 09.08.2024, in so far it is against the appellant is opposed to law, weight of evidence, facts and circumstances of the Appellant's case. 2. The NFAC has grossly erred in upholding the disallowance of Rs. 2,06,966/- u/r 87 of the Rules under the facts and circumstances of the case. 3. The NFAC has grossly erred in upholding the addition of Rs. 15,32,615/- as unexplained cash credits u/s 68 of the Act under the facts and circumstances of the case. 3.1 The NFAC has grossly erred in upholding the addition u/s 68 of the Act without admitting the evidences actually filed by the appellant under the facts and circumstances of the case. 4. The NFA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as filed deliberately. Therefore, we have to prefer substantial justice rather than technicality in deciding the same. Therefore, in our opinion, this is a fit case to condone the short delay of 35 days in filing the appeal before this Tribunal. Accordingly, the delay is condoned and the appeal is admitted for adjudication. 5. Now the brief facts of the case are that the assessee is engaged in the business of manufacturing RCC, PCC Poles in the name and style of M/s. Ghanshyam Enterprises. The assessee for the impugned assessment year 2018-19 filed his return of income on 26.02.2019 by declaring total income of Rs. 6,11,040/ -. Thereafter, the case of the assessee was selected for complete scrutiny assessment on the following issues: 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as per Rule 87 of the I.T. Rules. b) Large increase in unsecured loans :- During the course of assessment proceedings, the AO found that there was a large increase in unsecured loans during the financial year 2017-18, the total increase being Rs. 94,94,328/ -. However, the AO found that the total increase in unsecured loans to the extent of Rs. 52,84,910/- has not been proven to be genuine by the assessee and accordingly the said sum is deemed to be unexplained credit u/s 68 of the Act and added to the income of the assessee u/s 68 of the Act. c) Disallowance of interest paid on loans :- As the above loans are held to be non-genuine by the AO, the interest totaling to Rs. 1,35,561/- claimed to be paid/payable to the said parties o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l amount of Rs. 12,40,616/- which includes amount of salary paid being capitalized amounting to Rs. 8,07,000/ -. Therefore, the AR of the assessee submitted that the assessee can contribute up to 27% of Rs. 12,40,616/- which works out to Rs. 3,34,966/ -. However, the assessee has made total contribution of only Rs. 3,24,042/- which is much less than the statutory limit prescribed under Rule 87 of the I.T. Rules. Further, with regard to addition of Rs. 15,32,615/-, as confirmed by the ld. CIT(A)/NFAC, the assessee submitted that the assessee had received loan from Smt. Seema Sharma, Prop: Moti Industries, Koppal during the Assessment year under consideration. It is also submitted that a detailed written submission before the CIT(A)/NFAC toge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of Rule 87 of the I.T. Rules are reproduced below for ease of reference and record. "Ordinary annual contributions: 87. The ordinary annual contribution by the employer to a fund in respect of any particular employee shall not exceed (Twenty-seven) percent of his salary for each year as reduced by the employer's contribution, if any, to any provident fund (whether recognized or not) in respect of the same employee for that year." 11.2 On going through the above Rule, we find that the annual contribution by the employer to a fund in respect of employee shall not exceed 27% of his salary for each year as reduced by the employer's contribution. From the above it is clear that the Rule does not make any difference in so far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;s Salary. In view of the above, we are of the opinion that the assessee has not contravene the provisions of Rule 87 and accordingly we direct the AO to delete this addition as made by him by invoking Rule 87 of the I.T. Rules. Accordingly, this ground of appeal of the assessee is allowed. 11.4 Now coming to the addition of Rs. 15,32,615/- as confirmed by the ld. CIT(A)/NFAC, the ld. A.R. of the assessee submitted that a detailed written submission along with the financial statements, confirmation letter from Smt. Seema Sharma has been filed before the ld. CIT(A). However, ld. CIT(A) grossly erred in overlooking the submission made by the assessee in so far as providing the proof and evidence with regard to the loan availed from Smt. S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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