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2015 (4) TMI 48 - AT - Income TaxUnexplained (unsecured) loans - CIT(A) deleted the addition - Held that - The claimed unsecured loan was supported with sufficient documents and the Learned CIT(Appeals) after discussing the explanation of the assessee in this regard has deleted the addition by passing a reasoned order. We are thus not inclined to interfere therewith - Decided against revenue. Disallowance of depreciation - the assessee did not produce original bills/challan for verification - CIT(Appeals) deleted the disallowance - Held that - CIT(Appeals) held that the claim of the assessee regarding depreciation cannot be rejected merely on the ground that bills of purchase pertaining to the acquisition of fixed assets were not made available to the Assessing Officer. He noted that the Assessing Officer has not given his finding to the fact that the machinery and plants or other fixed assets have not at all been used during the accounting year under appeal or were kept idle. He noted further that the auditors have not made any adverse remarks in the tax audit report for the assessment year under consideration. The Learned CIT(Appeals) has accordingly directed the Assessing Officer to allow deprecation on the fixed assets purchased during the year under consideration in accordance with the admissibility thereof after necessary verification.- Decided against revenue. Disallowance of commission - addition made by AO with this finding that he was not satisfied with the explanation furnished by the assessee in this regard in absence of written agreement between the assessee and consignment agents - CIT(Appeals) deleted the addition - Held that - IT(Appeals) has deleted the addition on the basis that in other assessment years, similar claim was allowed and the Assessing Officer ought to have maintained consistency in this regard even during the year under consideration. The First Appellate Order on the issue is reasoned one, hence, we are not inclined to interfere therewith.- Decided against revenue. Unexplained share capital - CIT(Appeals) deleting the addition - Held that - The assessee, about the non-furnishing of bank statement had stated that they had approached to the bank to get the bank statement but failed to, because it was more than 13 years old. The assessee has, however, furnished the confirmation letters from the shareholder containing the details of amount invested, cheque no., date, bank particulars, PAN and income-tax particulars. All these documents were filed before the Assessing Officer as well as Learned CIT(Appeals). On the basis of furnishing these documents, CIT(Appeals) held that initial burden of the assessee was discharged. We concur with this view of the CIT(Appeals). It is well established proposition of law that after discharging of initial burden by the assessee to establish genuineness of the transaction, the onus shifts upon the Assessing Officer to rebut those evidences for the denial of the genuineness of the claimed transaction. No such effort has been on the part of the Assessing Officer to examine the correctness of above stated documents filed by the assessee to establish the genuineness of the transactions in question. See CIT vs. Lovely Exports (P) Ltd. (2008 (1) TMI 575 - SUPREME COURT OF INDIA), CIT vs. Value Capital Services (2008 (4) TMI 263 - DELHI HIGH COURT) & Bhav Shakti Steel Mines (P) Ltd. vs. CIT (2008 (12) TMI 22 - DELHI HIGH COURT) - Decided against revenue.
Issues Involved:
1. Deletion of addition under Section 68 of the Income-tax Act, 1961 for unexplained loans. 2. Deletion of addition for depreciation claimed on additions to fixed deposits. 3. Deletion of addition for unexplained commission. 4. Deletion of addition under Section 68 for unexplained share capital. 5. Deletion of addition for depreciation claimed on additions to fixed assets. 6. Deletion of addition for unexplained unsecured loan. Detailed Analysis: Issue 1: Deletion of addition under Section 68 of the Income-tax Act, 1961 for unexplained loans The Revenue challenged the deletion of Rs. 9,21,608 added by the Assessing Officer (A.O.) under Section 68 for unexplained loans. The A.O. had made the addition due to the assessee's failure to produce bank statements. However, the CIT(A) deleted the addition after being satisfied with the evidence provided, including confirmation letters from cash creditors, VDIS disclosures, and other financial documents. The Tribunal upheld the CIT(A)'s decision, noting that the claimed unsecured loan was supported with sufficient documents, and the CIT(A) provided a reasoned order. Issue 2: Deletion of addition for depreciation claimed on additions to fixed deposits The A.O. disallowed Rs. 2,83,929 in depreciation claimed by the assessee due to the non-production of original bills/challans. The CIT(A) deleted the disallowance, reasoning that the fixed assets were from a very old period and the books of account were audited without adverse remarks. The Tribunal upheld this decision, agreeing that the claim could not be rejected merely due to the absence of bills, especially since the assets were used during the accounting year. Issue 3: Deletion of addition for unexplained commission The A.O. disallowed Rs. 3,89,936 claimed as commission due to the absence of a written agreement between the assessee and consignment agents. The CIT(A) deleted the addition, noting that similar claims were allowed in other assessment years and that there was a verbal agreement. The Tribunal upheld the CIT(A)'s decision, emphasizing the need for consistency in assessments. Issue 4: Deletion of addition under Section 68 for unexplained share capital The Revenue contested the deletion of Rs. 14,00,000 added by the A.O. under Section 68 for unexplained share capital. The A.O. made the addition due to the lack of bank statements. However, the CIT(A) deleted the addition based on the evidence provided, including confirmation letters from shareholders. The Tribunal upheld this decision, noting that the initial burden of proof was met by the assessee, and the A.O. failed to rebut the evidence. Issue 5: Deletion of addition for depreciation claimed on additions to fixed assets The A.O. disallowed Rs. 3,96,639 in depreciation due to the non-production of original bills/vouchers. The CIT(A) deleted the disallowance, reasoning that the fixed assets were from a very old period and the books of account were audited without adverse remarks. The Tribunal upheld this decision, agreeing that the claim could not be rejected merely due to the absence of bills, especially since the assets were used during the accounting year. Issue 6: Deletion of addition for unexplained unsecured loan The A.O. added Rs. 98,560 under Section 68 for unexplained loans due to the absence of bank statements. The CIT(A) deleted the addition, noting that the assessee provided confirmation letters and copies of income-tax returns. The Tribunal upheld this decision, emphasizing that the A.O. should have verified the confirmations before making the addition. Conclusion: Both appeals by the Revenue were dismissed, with the Tribunal upholding the CIT(A)'s decisions on all contested issues. The Tribunal emphasized the importance of sufficient documentation and consistency in assessments, while also recognizing the challenges of obtaining old financial records.
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