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TMI Blog2012 (10) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... um of expenditure incurred was very much reasonable. CIT(A) rightly deleted the dis-allowance - Decided against Revenue - I.T.A.No. 129/Ind/2012 - - - Dated:- 12-7-2012 - SHRI JOGINDER SINGH AND SHRI R.C.SHARMA, JJ. Appellant by : Shri Keshav Saxena, CIT DR Respondent by : Shri H.P.Verma and Ms. Sakshi Verma, Advocates ORDER PER R. C. SHARMA, A.M. This is an appeal filed by the assessee against the order of CIT(A) dated 20th December, 2011, for the assessment year 2007-08, in the matter of order passed u/s 143(3) of Incometax Act, 1961. 2. Rival contentions have been heard and records perused. During the course of assessment, following credits were added by Assessing Officer u/s 68 :- Hitakshi Media Solutions Pvt.Ltd. Rs. 34,21,000 Kishorilal Arora Rs. 5,00,000 Lake City Motors Pvt.Ltd. Rs. 98,42,301 Sanjeev Maheshwari Rs. 45,00,000 Uma Maheshwari Rs. 3,95,000 Rs. 1,86,58,301 3. The Assessing Officer has also made disallowance of expenses of Rs. 1,34,600/-, on following counts :- Name of Expenses Disallowance 1. Telephone Expenses 20,800 2. Business Promotion 10,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hitakshi Media Solutions Pvt. Ltd. during the whole year on different dates. The Assessing Officer made the addition mainly on account of the reason that confirmation and copy of bank account of the creditor was not filed. During the appellate proceedings the appellant filed various documents including confirmation as well as a copy of bank account of the creditor from which amount was transferred or advanced on different dates. All these documents were made available to the Assessing Officer for necessarily examination and furnishing of remand report. It is noted that M/s. Hitakshi Media Solutions Pvt. Ltd. is an existing assessee and the bank account of the creditors was also of a regular nature. The transaction in the bank account are also of regular nature. The Assessing Officer examined all such document and submitted his remand report vide It. dt. 11/08/2011. The Assessing Officer has not disputed the identity, Credit worthiness and genuineness of the transactions. The Assessing Officer however stated that the assessee had not filed any details as regards repayment through journal entries approximately for Rs 35 lacs relating to salary payable in the case of creditor. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has sent his remand report. However the appellant filed the bank statement during the subsequent appellate proceedings and the transactions in the bank account are found to be a regular nature. The appellant has complied with the essential requirement of provisions of section 68 and therefore, the addition of Rs. 5 lacs can not be sustained. The addition is accordingly deleted. (iii) Lake City Motors Pvt. Ltd. - Rs.98,42,301/- : The Assessing Officer has made addition of Rs.98,42,301/- on account of unexplained unsecured loan taken from Lake City Motors Pvt. Ltd. During the appellate proceedings, the appellant has filed a ledger account of appellant company in the books' of Lake City Motors Pvt. Ltd. in respect of A. Y. 2007-08. As per the ledger account the appellant company was having opening credit balance for Rs. 13,44,500/-. During the year under consideration various transactions of credits and debits have been made and as on 31.03.2007 Lake City Motors Pvt. Ltd. was having credit balance for Rs. 23,08,814/-. The appellant has also filed copies of bank statement of Lake City Motors Pvt. Ltd. with Centurion Bank Ltd., M.P. Nagar, Bhopal. M/s. Lake City Motors Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from immediate credit of Rs. 20,00,000/- on account of transfer from another account. The document filed by the appellant in respect of loan transaction of Rs. 45 lacs from Shri Sanjeev Maheshwari were made available to the Assessing Officer and the Assessing Officer after examining the same submitted a report stating therein that the details of credit of Rs. 45 lacs and 20 lacs in the account of Shri Sanjeev Maheshwari was not filed. However during the appellate proceedings the appellant further stating that amount of Rs. 20 lac and 25 lacs were received by Shri Sanjeev Maheshwari from MIs Hitakshi Media Solutions Pvt. Ltd The appellant also filed bank account of MIs Hitakshi Media Solutions Pvt. Ltd from where amount of Rs. 25 lacs and 20 lacs were transferred in the bank account of Shri Sanjeev Maheshwari. As discussed above Shri Sanjeev Maheshwari is regularly assessed to tax in Mumbai. The confirmation of the creditor, PAN and copy of IT Return shows that identity of Shri Sanjeev Maheshwari is proved and can not disputed. The transactions of Rs. 45 lacs has been made through regular banking channel and the appellant has also explained the source of source amounting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.3,95,000/- is factually incorrect. Further as discussed above, Smt. Uma Maheshwari is regularly assessed to tax also having a running bank account whose transactions are also of regular nature. Therefore, in these circumstances it cannot be said that the identity, creditworthiness genuineness is not proved. The appellant has complied with the essential requirement of provisions of section 68 and therefore, the addition of Rs.3,95,000/- can not be sustained. The addition is accordingly deleted. 5. The CIT(A) also deleted the disallowance of expenditure of Rs. 1,34,600/- by observing that the Assessing Officer has not pointed out as to which particular item of expenses were not supported by bills or respective vouchers. The CIT(A) also found that the Assessing Officer has not brought any evidence on record to indicate that these expenses were incurred for business purposes or that these were of personal nature. Accordingly, the routine disallowance was made by the Assessing Officer and deleted by the ld.CIT(A). 6. The Revenue is in further appeal before us and had taken following grounds :- On the facts and in the circumstances of the case, the CIT(A) has erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, application under Rule 46A was filed before the CIT(A) alongwith all the documentary evidence to satisfy the requirement of loan creditor u/s 68. The ld. CIT(A) sent all these documents to the Assessing Officer for his remand report after due verification of documents sent to him with respect to requirement of Section 68. The ld. CIT(A) also called rejoinder from the assessee. After considering the remand report rejoinder filed by the assessee and all the documents filed to support loan transactions, the ld. CIT(A) recorded detailed finding with respect to each and every loan creditor, at page 4 to 7 of his appellate order. The detailed finding recorded by the ld.CIT(A) after considering the documents filed by assessee to substantiate the loan transactions entered by assessee with all the five loan creditors, as reproduced hereinabove clearly establish that the assessee has not only satisfied the condition of identity of the loan creditor but also genuineness of loan transaction and creditworthiness of loan creditor to advance the required amount of loan. The detailed finding recorded by the ld.CIT(A) are as per materials placed on record and the same has not been controvert ..... X X X X Extracts X X X X X X X X Extracts X X X X
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