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TMI Blog2004 (8) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... closed to the Assessing Officer. Therefore, it was held that the expenses claimed were not allowable. The facts of the instant case are quite different. The assessee has not only given the names and addresses but also other supporting evidences were also given regarding the genuineness of the transactions. Therefore, we are of the considered opinion that the addition made by the Assessing Officer and confirmed by the Ld. CIT(A), is not sustainable. The same is, therefore, deleted. This ground of the assessee is therefore, allowed. In the result, Assessee appeal is allowed. - PRADEEP PARIKH AND D.K. TYAGI, JJ. R.P. Meena for the Appellant. Sunit Mehra for the Respondent. ORDER D.K. Tyagi, Judicial Member - As these appeals belong to the same assessee, they are disposed of by this consolidated order dealing with each appeal separately. ITA No. 3750/Del./2000 : 2. This is a Departmental appeal against Order dated 5-6-2000 of the Ld. CIT(A)-X, New Delhi. 2.1 The 1st Ground, taken by the Department, is as under : "(1) That the Ld. CIT(A) has erred in law and facts of the case by giving a relief of Rs. 17,012 under the head freight charges." 2.2 The brief facts of the case, as they eme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the details of the Freight Charges, which was not disputed by the Assessing Officer. In the light of these facts, we are not inclined to interfere with the order of the Ld. CIT(A) on this issue and the same is upheld. This ground of the Department is dismissed. 2.5 The 2nd ground, taken by the Department, is as under : "(2) That the Ld. CIT(A) has erred in law facts of the case by giving a relief of Rs. 2,05,966 on account of addition of cash credits under section 68 of Income-tax Act." 2.5-1 This ground relates to the amount of Rs. 30,000 of Gift received from Shri Vinod Verma and Rs. 1,75,966 an advance received from M/s. Asha Udyog. "The Assessing Officer has treated them as cash credits under section 68 of the Income-tax Act, 1961. 2.5-2 In course of the assessment proceedings the Assessing Officer noticed that Shri Ashok Soni, partner of the assessee-firm, introduced Rs. 10,000 by taking loan from his son who was also a partner in the firm. The son of the assessee, Shri Rajat Soni has received a gift of Rs. 10,000 from his uncle to finance his father. The Assessing Officer found that Shri Vinod Verma who gave Rs. 10,000 as gift to Shri Rajat Soni, had also given another gift ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uspended its business due to sealing of its factory under the Pollution Control Measures taken by the Delhi Government. The assessee firm had business dealings with M/s. Ashok Udyog in the succeeding years also. The Ld. CIT(A) has deleted this addition for these reasons. Aggrieved by this order of the Ld. CIT(A) now the assessee is in appeal before us. 2.5-6 At the time of hearing the Ld. Departmental Representative relied on the order of the Assessing Officer and the judgment in the case reported in CIT v. Precision Finance (P.) Ltd. [1994] 208 ITR 465 1 (Cal.) wherein it has been held that mere payment by Cheque is not a conclusive proof of payment while the Ld. AR of the assessee relied on the order of the Ld. CIT(A). 2.5-7 Heard both the parties and perused the record. We find that while deleting this addition the Ld. CIT(A) has observed as under : "I have considered the submissions made by the AR of the appellant and the facts of the case. I have also perused the ledger copy of the Account of M/s. Ashok Udyog. It is found that on 1-4-1996 there was debit balance of Rs. 2,62,765 and during the year the assessee raised various bills against which, the payments have been received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .8 The next Ground, taken by the department, is as under : "(6) That the Ld. CIT(A) has erred in law facts of the case by giving a relief of Rs. 7,000 under the head : Telephone expenses (Other)." 2.8-1 The Assessing Officer disallowed Rs. 12,000 out of expenses incurred on Office Telephone. This disallowance has also been made for personal use. The Ld. CIT(A) restricted this disallowance to Rs. 5,000. On this point also, we are not inclined to interfere with the order passed by the Ld. CIT(A). This ground of the Department is also dismissed. 2.9 The next ground, taken by the Department, is as under : "(7) That the Ld. CIT(A) has erred in law facts of the case by deleting an addition of Rs. 4,00,000 which was made under section 41(1) of the Income-tax Act." 2.9-1 The Assessing Officer found that the assessee had raised a loan of Rs. 4 lakhs from Smt. Annu Choudhary. This was outstanding for the last 3 to 4 years on which interest was also not paid. The Assessing Officer observed in his order that either the assessee had no intention to pay back the loan or paid the same outside the books of account. In course of the assessment proceedings the assessee filed a letter from Smt. Annu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explanation of the assessee and made an addition of Rs. 3,79,880 on the ground that the assessee has not made any effort to produce the persons to whom the commission was paid, notices issued were either received back unserved or the parties did not respond to the notices; the assessee has failed to prove that the payments have actually been made and such payments were made for purpose of the business and the parties have rendered services to the assessee. The parties, who were not found at the addresses given by the assessee, should have easily been contacted by the assessee who could have produced them for deposition. Aggrieved by this order of the Assessing Officer, the assessee filed appeal before the Ld. CIT(A). Before the Ld. CIT(A) the contention of the assessee was that the Assessing Officer has not made full investigation of the information and the documents available with him. The Bank Accounts of the assessee from which the payment of commission was made by Cheque, were also furnished. The Assessing Officer has not taken any action against the persons to whom notices under section 131 were served and not complied with. The Assessing Officer should have verified the payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lower Authorities and argued that the Assessing Officer issued the Notices under section 131 for verification of the Commission paid to the various parties and since those parties did not appear before him for this verification, he was left with no option but to make this addition. In cases where notices became unserved, opportunities were given by the Assessing Officer to the assessee and, therefore, it could not be said that identities of the persons were established. The details of services rendered were also not given by the assessee. He, therefore, argued that the addition made by the Assessing Officer and sustained by the Ld. CIT(A), should be upheld. 3.1-4 In reply, the Ld. AR of the assessee submitted that the new addresses of the persons were given by the assessee but no fresh notices under section 131 were issued by the Assessing Officer. Regarding the services rendered by these parties, he submitted that the details of commission paid were duly filed before the Assessing Officer and the Ld. CIT(A). Finally he said that since no proper verification either on the part of the Assessing Officer or the Ld. CIT(A), has been done, the addition should be deleted. 3.1-5 Heard bot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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