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TMI Blog2014 (2) TMI 885X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee contended that he has not received any additional interest nor there was any claim in the hands of the firm - The decision in G. Venkat Rao & Others Versus Asstt. Commissioner of Income-tax, Circle 8(1), Hyderabad [2012 (10) TMI 530 - ITAT HYDERABAD] followed - Interest paid to partners, which has been disallowed in the hands of the partnership firms cannot be assessed in the hands of the partners – the order set aside and the matter remitted back to the AO for determination of correct amount – Decided in favour of Assessee. - ITA Nos. 1102 & 2088/Hyd/2011 - - - Dated:- 1-1-2014 - Shri B. Ramakotaiah And Smt. Asha Vijayaraghavan,JJ. For the Petitioner : Shri S. Rama Rao For the Respondent : Shri P. Somasekhar Reddy ORDER Per Bench: These appeals by Assessee are directed against the orders of CIT(A)-III, Hyderabad. Since identical issues are involved, these appeals were clubbed and heard together and, therefore, we dispose of these appeals by way of this consolidated order. We have heard Ld.Counsel and Ld. CIT DR in detail. ITA NO. 1102/Hyd/2011 for AY 2007-08. 2. Ground No. 1 2 are general in nature. Ground No.3 Is pertaining to Cash cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount out of his earnings abroad, during the previous year. In fact, the said person has failed to establish such unsecured loan, claimed to have been given to Assessee. F8urther, the appellant has also failed to establish genuineness of such transaction for an amount of Rs. 6,85,000/-. Under these circumstances, and having regard to the reasons stated by the AO in para 3 of the assessment order, the said addition made by him towards unexplained credit u/s 68 of the Act, in this case is justified. Hence, such addition of Rs. 6,85,000/- is confirmed. 5. Before us the learned counsel submitted that the amount was taken for the business activity of Assessee in the name of Sri Seetharamanjaneya Flour Mill and the creditor confirmed having given the amount of Rs. 6,85,000/- vide cheque No. 216126 on 26-10-2006. He further submitted that the creditor Shri Uma Maheswara Rao confirmed in his confirmation letter that he was working in Kingdom of Saudi Arabia for more than 12 years and derived income from salary and provided the amount from out of his NRI earnings. 6. The learned DR, however, supported the orders of AO and CIT(A). 7. We have heard both the parties and perused the recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance made by the AO at Rs. 2,91,503/- in this case, appears to be on the higher side. In my view, it would be fair and reasonable to make such disallowance in this case at Rs. 1,50,000/-. Accordingly, the AO is directed to make such disallowance out of the transport charges claimed in the return at Rs. 1,50,000/- only, which would result in relief of Rs. 1,41,503/- to the appellant. 10. We have heard the arguments of both the parties and perused the record as well as gone through the orders of AO and CIT(A). Out of the claim of transportation charges, the AO disallowed 10% on the ground that the claim is on higher side and vouchers maintained by Assessee for the same are not verifiable. The CIT(A) restricted the disallowance to Rs. 1,50,000/- on the ground that the disallowance made by the AO is on higher side. As seen from the order of AO there is unaccounted turnover in the case of asessee unearthed in the search. Consequent to that asessee admitted the turnover and aggreed for addition on GP, which the AO accepted. Once addition was made on the basis of GP disallowance of various expenditures should not arise. Therefore, the addition of Rs. 1,50,000/- sustained by CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt does not have any credit under the head interest . Interest paid to partners, which has been disallowed in the hands of the partnership firms cannot be assessed in the hands of the partners. In these circumstances, we deem it fit to set aside the issues with respect to the addition of Rs. 3,54,655/- and the addition of Rs. 6,06,332/- to the file of the Assessing Officer to determine the correct amount of interest received by the assessee from partnership firms. Accordingly, ground Nos. 4 5 are allowed for statistical purposes. 14. In view of the decision of the coordinate bench, we set aside the issue to the file of the Assessing Officer to bring to tax in the hands of Assessee only to the extent of interest allowed in the hands of the firm. Thus, ground No. 5 is allowed for statistical purposes. 15. In the result, appeal of Assessee in ITA No. 1102/Hyd/2011 is allowed for statistical purposes. ITA NO. 2088/HYD/2011 for AY 2008-09 16. This appeal is directed against the order of CIT(A)-III, dated 14- 10-2011. Ground No. 1 6 are general in nature. Ground No. 2 pertaining to the addition on account of transport charges. Ground Nos. 3 4 are pertaining to the additi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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