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2018 (7) TMI 740 - AT - Income TaxAddition U/s 40(a)(ia) non deduction of TDS on generator hiring charges and transportation expenses - Held that - Nothing has been brought on record either during the assessment or the appellate proceedings that the TDS so deducted has been deposited before the due date of filing of return of income. In view of the same, the addition so made by the Assessing officer regarding DG hire charges is hereby confirmed. Non deduction of TDS on the transportation expenses - contention of assessee as under no obligation to deduct TDS on the transportation expenses - Held that - In this regard, we find that at the assessee s paper book, at page 55, payment of ₹ 1.50 lakhs, ₹ 1.90 lakhs and ₹ 4 lakhs has been made on respective dates and the amounts have been debited under the head transportation expenses . Therefore, prima facie the contention so raised by the assessee cannot be accepted. Further, in absence of any documentary evidence in support of its contention, the addition so made by the Assessing Officer is hereby confirmed. Addition on account of interest on FDR not disclosed in the books of accounts - Held that - CIT(A) has returned a finding that the appellant is maintaining the books of account on mercantile basis and therefore the accrued interest should have been accounted for on such FDR and should have been declared as income during the year. We do not see any infirmity in the said finding of the ld. CIT(A). However, as far as the quantum of interest is same, AR has contended that the AO has presumed accrued interest @ 10% on FDR. In light of the same, we hereby directed the Assessing Officer to apply the interest rate as applicable on the specified FDR amount as prevalent during the relevant period. Alternative plea of the ld. AR cannot be accepted as it would be a case of fresh claim and there is nothing on record in terms of any interest of secured loans which has been contractually agreed upon between the assessee and borrowers and which has not been debited in the P & L account. Unexplained cash credit U/s 68 - Held that - Assessee was required to prove the identity, creditworthiness of the lender and genuineness of the transaction in the form of copy of return of income, computation of income and bank statement but the assessee has not furnished any details which can prove the same and in absence of the same, it has been held that the assessee has not discharged the onus cast upon him U/s 68 of the Act. The ld. CIT(A) has also returned a finding that the assessee has not discharged the onus of providing the requisite evidences to show the genuineness of loan amount received from M/s Tomar construction Company. Accordingly, we do not see any infirmity in the finding of the ld. CIT(A). Hence, the same is confirmed and the ground taken by the assessee is dismissed. Disallowance of interest U/s 36(1)(iii) - Held that - contended by the ld. AR that interest free funds available with the assessee are more than the interest free advance to M/s Ganpati Real Mart and Developers Pvt. Ltd. and therefore, it cannot be held that the borrowed funds from the over draft account have been diverted as advances to M/s Ganpati Real Mart and Developers Pvt. Ltd. It has further been contended that the said advance is for the purpose of purchase of shop which is in the posssession of the assessee however, for some technical reasons the registry has not been made in the name of the assessee. In our view, all these contentions needs to be verified and we accordingly, set aside the matter to the file of the Assessing officer to examine. Disallowance of 30% of the diesel and fuel expenses of ₹ 1,00,000/- and repairs and maintenance expenses - Held that - As during the appellate proceedings, no evidence has been brought on record to substantiate the expenses as having incurred for the purposes of the business. The ld. CIT(A) has returned the finding that in absence of discharging the primary onus proving that such expenses have been incurred or expended for the purpose of assessee s business, the AO is justified in disallowing such expenditure. We do not see any infirmity in the said findings of the ld CIT(A). Hence, the ground taken by the assessee is dismissed. Disallowance of depreciation on fridge - Held that - During the assessment proceedings, the assessee was asked to furnish the documentary evidence in support of addition made in fixed asset however, in absence of any bills towards the purchase of the fridge, the claim of the depreciation was disallowed. During the appellate proceedings, the CIT(A) has returned a finding that the assessee has not been able to discharge the onus of providing the details of putting to use the asset during the year, therefore he confirmed the disallowance of depreciation - No infirmity in the finding of the ld. CIT(A).
Issues Involved:
1. Addition of ?81,66,124/- as undisclosed income. 2. Addition under Section 40(a)(ia) for non-deduction of TDS on generator hiring charges and transportation expenses. 3. Addition of ?4,74,000/- on account of undisclosed interest on FDR. 4. Addition of ?4,55,000/- as unexplained cash credit under Section 68. 5. Disallowance of interest under Section 36(1)(iii). 6. Disallowance of 30% of diesel, fuel, and repairs and maintenance expenses. 7. Disallowance of depreciation on fridge. Issue-wise Detailed Analysis: 1. Addition of ?81,66,124/- as Undisclosed Income: The assessee challenged the addition made by the Assessing Officer (AO) based on differences between cash deposits and withdrawals, and unexplained credit entries in bank accounts. The CIT(A) confirmed the addition without considering the assessee's written submissions during remand proceedings. The Tribunal found that the additional evidence submitted by the assessee was not examined by the AO. Therefore, in the interest of justice, the matter was remanded to the AO for fresh examination of the additional evidence, allowing reasonable opportunity to the assessee. 2. Addition under Section 40(a)(ia) for Non-deduction of TDS: The assessee contended that the expenses were paid during the year and thus Section 40(a)(ia) was not applicable. This contention was rejected based on the Supreme Court decision in Palam Gas Service vs. CIT. The assessee also claimed TDS was deducted on generator hire charges but failed to provide evidence of TDS deposit. Hence, the addition was confirmed. For transportation expenses, the assessee's contention that no payment exceeded the threshold was rejected due to lack of documentary evidence, and the addition was confirmed. 3. Addition of ?4,74,000/- on Account of Undisclosed Interest on FDR: The assessee argued that the interest on FDR placed as a security deposit with the Mining Department was presumed by authorities without actual accrual. The CIT(A) found the books were maintained on a mercantile basis, thus accrued interest should be accounted for. The Tribunal directed the AO to apply the actual interest rate on the FDR amount and remanded the matter for determination of actual interest, rejecting the alternative plea for credit of interest on unsecured loans. 4. Addition of ?4,55,000/- as Unexplained Cash Credit under Section 68: The assessee claimed an unsecured loan from Tomar Construction Company but failed to provide identity, creditworthiness, and genuineness of the transaction. The CIT(A) and AO found the assessee did not discharge the onus of proof. The Tribunal saw no infirmity in the findings and confirmed the addition. 5. Disallowance of Interest under Section 36(1)(iii): The AO disallowed interest on overdraft as funds were diverted towards interest-free loans to M/s Ganpati Real Mart and Developers Pvt. Ltd. The assessee claimed the advance was for purchasing a shop, not a loan, and had sufficient interest-free funds. The Tribunal remanded the matter to the AO to verify the assessee's contentions and provide reasonable opportunity for evidence submission. 6. Disallowance of 30% of Diesel, Fuel, and Repairs and Maintenance Expenses: The AO disallowed 30% of expenses due to lack of supporting bills and vouchers. The CIT(A) upheld the disallowance as the assessee failed to prove the expenses were for business purposes. The Tribunal found no infirmity in the CIT(A)'s findings and dismissed the ground. 7. Disallowance of Depreciation on Fridge: The AO disallowed depreciation on a fridge due to lack of purchase evidence. The CIT(A) confirmed the disallowance as the assessee did not discharge the onus of proving the asset's use during the year. The Tribunal upheld the CIT(A)'s decision and dismissed the ground. Conclusion: The appeal was partly allowed for statistical purposes, with some matters remanded for fresh examination and others confirmed based on lack of evidence or failure to discharge the onus of proof. The order was pronounced in open court on 06/07/2018.
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