9911796707
TMI Blog2012 (12) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... cation - assessee gets a further relief of Rs. 15,000/ - on this account -appeals of assessee allowed partly. Addition u/s 68 - unsecured loan as non-genuine – Held that:- As in earlier year, the department has not doubted the credit worthiness of Shri Harbans Singh father of the assessee, who is regularly assessed to tax & considering the contention of the assessee that these funds were used by Shri Harbans Singh for purchasing demand drafts directly from the bank in favour of the supplier of the assessee to meet financial emergency of the assessee there is no merit in the contention of the DR that amount of Rs. 50,000/ - and Rs. 65,000/ - withdrawn by Shri Harbans Singh do not figure in the bank account of the assessee. In view of the above, the addition of Rs. 1,15,000/ - made by the Assessing Officer and confirmed the CIT(A) deserves to be deleted - in favour of assessee. Disallowance of expenses in part incurred for business – Held that:- The expenses in question relate to petrol , salaries, telephone etc. which are necessary for smooth running of a business. However, as per law, the assessee was required to produce supporting evidence to claim these expenses which are a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts have not been produced and after reducing the gross profit of Rs. 60,000/- estimated above additional purchases would come to Rs. 9,40,000/- which have been made outside the books of account. Therefore, an addition of the like amount i.e. Rs. 9.40.000/- is being made. 4. Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before the CIT(A). In the course of appellate proceedings, the CIT(A) called for a remand report from the Assessing Officer. The Assessing Officer vide remand report dated 28.11.2009 stated that the assessee did not produce books of account during the assessment proceedings as well as before him on the plea that the books of account have been lost and has filed copy of DDR dated 4.12.2008. The Assessing Officer further stated that the assessee was asked to produce any other document to substantiate his claim regarding gross profit and genuineness of purchases. The Assessing Officer has stated in his report that the assessee filed certified copies from Sales Tax Department of quarterly sale tax returns in support of his claim of purchases and sales made during the year. The Assessing Officer has further stated that as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has mentioned that the assessee has not maintained any stock register or quantitative stock tally and has also not produced books of account , in the absence of which, the trading results shown by the assessee cannot be accepted and GP and turn over of the assessee needs to be enhanced accordingly. The Assessing Officer has also mentioned in the remand report that as per the balance sheet of the assessee, the figure of closing stock was at Rs. 5599630.70 and sundry creditors were shown at Rs. 4024369.77. The Assessing Officer has categorically stated that the list of sundry creditors was not furnished along with the balance sheet . During the remand proceedings, the Assessing Officer asked the assessee to supply a list of sundry creditors so as to verify the genuineness of creditors shown in the balance sheet. However, the assessee had shown his inability to file the same. It is observed that the Assessing Officer has estimated the additional purchases at Rs. 9,40,000/ - without bringing any material on record. At the same time, there is no satisfactory explanation on behalf of the assessee regarding the discrepancies pointed out by the Assessing Officer in the books of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee gets a further relief of Rs. 15,000/ - on this account . Ground No.3 of the appeal is allowed partly. 11. Ground No.4 of the appeal reads as under: - 4 That in the facts and circumstances of the case, the Id. Commissioner of Income Tax (Appeals) gravelly erred in upholding the addition of Rs. 1,15,000/- made by the Id. Assessing Officer by treating the unsecured loan as non-genuine, although the assessee had proved the identity, mode of transaction and credit worthiness of the person from whom he had taken loan. 12. The Assessing Officer has discussed this issue in para 4 of the assessment order. The Assessing Officer observed that during the year under consideration, the assessee has introduced two unsecured loans of Rs . 2,33,000/ - from Shri Harbans Singh and Smt. Surjit Kaur. The Assessing Officer required the assessee to prove the genuineness of these loans. However, none of them was produced before the Asses sing Officer. Even the assessee has failed to furnish any confirmation from these creditors. The Assessing Officer, therefore, made an addition of Rs. 2,33,000/- and added the same to the total income of the assessee. 13. Aggrieved by the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see before the lower authorities was that these funds were used by Shri Harbans Singh for purchasing demand drafts directly from the bank in favour of the supplier of the assessee to meet financial emergency of the assessee. Considering the entire facts and circumstances of the present case, there is no merit in the contention of the Ld. DR that amount of Rs . 50,000/ - and Rs. 65,000/ - withdrawn by Shri Harbans Singh do not figure in the bank account of the assessee and, hence, the assessee has failed to prove the genuineness of the transaction. In view of the above, the addition of Rs. 1,15,000/ - made by the Assessing Officer and confirmed the CIT(A) deserves to be deleted. Accordingly, we delete the addition of Rs. 1,15,000/ - and al low ground No.4 of the appeal . 16. Ground No.5 of the appeal reads as under: - 5 (a) That the Id. Commissioner of Income Tax (Appeals) gravel ly erred in upholding the disallowance of Rs . 75,000/ - made by the Id. Assessing Officer out of expenses incurred by the assessee for the purpose of business, b) That without prejudice the addition sustained is highly excessive. 17. The Assessing Officer has discussed this issue in para 5 of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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