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TMI Blog2014 (4) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... as the CIT(A) has already reduced the disallowances by 50% - thus, there is no no need for any interference in the order of the CIT(A) – Decided against Assessee. Deletion of addition u/s 68 of the Act - Unexplained cash credit – Held that:- CIT(A) rightly held that the confirmations were furnished by the party and also furnished its PAN to AO - the loan was returned in subsequent year and the sum of Rs. 2,93,138/- represents provision for interest on the opening balance plus the money introduced during the year - the assessee has successfully discharged the initial onus cast upon it by virtue of Sec. 68 of the Act – this, there is no need for interference in the order of the CIT(A) – Decided against Revenue. Addition u/s 68 of the Act – Onus to prove - Amount received from MD of the company as cash credit – Held that:- CIT(A) has rightly held that the assessee has shown the amount from Directors under the head ‘unsecured loans’ from the Directors – the provisions of Sec. 68 clearly apply on the facts of the case - the primary onus is on the assessee and this onus stands undischarged - the addition for the reasons that the assessee has not discharged the primary onus cast on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1012/M/11 are cross appeals by the assessee and the Revenue for assessment year 2002-03. ITA No. 1740/Mum/2010 and ITA No. 2316/M/10 are cross appeals by the assessee and the Revenue for assessment year 2004-05. ITA No. 2374/M/10 for A.Y. 2006-07 is filed by the assessee and ITA No. 7490/M/11 for A.Y. 2002-03 is an appeal filed by the assessee against levy of penalty u/s. 271(1)(c) of the Act. All these appeals were heard together and are disposed off by this common order for the sake of convenience and brevity. All these appeals were first posted for hearing on 6.1.2011. The case was adjourned for want of time. Thereafter these appeals were posted for hearing on 28.3.2011, the assessee took adjournment. Thereafter, whenever the appeals came up for hearing, the assessee sought adjournment for one reason or the other. On this date of hearing, none appeared for the assessee therefore we have decided to proceed ex parte. ITA No. 254/M/2011 A.Y. 2002-03 Assessee s appeal 2. The first grievance of the assessee relates to the addition of Rs. 21,49,000/- being loan received from Shri Raouff Ansari as unexplained cash credit u/s. 68 of the Act and second grievance of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and the submissions and the remand report, the Ld. CIT(A) proceeded to consider each and every loan transaction. 6. So far as addition of Rs. 21,49,000/- in the name of Raouff Ansari is concerned, the Ld. CIT(A) observed that the assessee has shown an amount of Rs. 37,06,000/- in cash from the said party. The Ld. CIT(A) further observed that there was cash payment of Rs. 15,57,000/-. The Ld. CIT(A) was convinced that the assessee has failed to discharge the onus cast upon it by virtue of Sec. 68 and confirmed the addition of Rs. 21,49,000/- in the name of Shri Raouff Ansari. 7. We have heard the Ld. Departmental Representative and perused the orders of the lower authorities. The fact that the loan was taken is not in dispute. We find that the assessee has never discharged the initial onus cast upon it by Sec. 68 of the Act failing which we do not find any reason to interfere with the findings of the Ld. CIT(A). The addition of Rs. 21,49,000/- is confirmed. 8. The second grievance of the assessee relates to the addition of Rs. 2,640/-. The Ld. CIT(A) has confirmed this addition for want of verifiable details. As no details were provided, we do not find any reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sult, the appeal filed by the assessee is dismissed. ITA No. 1012/M/2011 A.Y. 2002-03 Revenue s appeal 16. The sole grievance of the Revenue is that the deletion of addition made u/s. 68 of the Act in respect of unexplained cash credit in the name of M/s. Mudra Exports amounting to Rs. 21,44,170/-. 17. The AO has made the addition u/s. 68 of the Act, on receiving no details from the assessee which could prove the genuineness of the transaction and the creditworthiness of the creditors. When the matter was argued before the Ld. CIT(A), the Ld. CIT(A) observed at para-2 on page-13 that the party had appeared before the AO in response to summons issued. Confirmations were furnished by the party and also furnished its PAN to AO. The Ld. CIT(A) further observed that the loan of Rs. 19 lakhs was returned in subsequent year and the sum of Rs. 2,93,138/- represents provision for interest on the opening balance plus the money introduced during the year. Accordingly, the Ld. CIT(A) was convinced that the assessee has successfully explained the credit in the name of Mudra Exports and deleted the addition. 18. On carefully considering the order of the lower authorities, we find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e primary onus cast on it u/s. 68 of the Act. We do not find any reason to interfere with the findings of the Ld. CIT(A). Addition of Rs. 39,60,000/- is accordingly confirmed. Ground No. 1 is accordingly dismissed. 25. Ground No. 2 relates to the disallowance of Rs. 76,153/- as prior period expenses. 26. The AO has discussed this issue at para-3 on page-4 of his order wherein he has observed that the assessee has failed to discharge the primary onus of substantiating its claim of deduction by not providing the details and disallowed the entire sum of expense at Rs. 2,33,342/-. 27. Before the Ld. CIT(A), the assessee submitted that the prior period expenses comprise of octroi charges of Rs. 1,57,189/- and advertisement of Rs. 76,153/-. It was explained before the Ld. CIT(A) that octroi charges are first paid to Dolphin Logistics by debiting the party s account and only when the invoices are received from the said party, the liability is taken as crystallized and the expenses are accordingly debited. The Ld. CIT(A) was convinced that the liability for octroi charges did crystallized during the year and allowed the relief to the extent of Rs. 1,57,189/-. 28. In so far as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is an undisputed fact that the AO has made the addition u/s. 41(1) of the Act only because he found that the liabilities were outstanding for more than one year. We find that the Ld. CIT(A) has rightly observed that this cannot be any ground for making the addition u/s. 41(1) of the Act. We therefore do not find any reason to interfere with the findings of the Ld. CIT(A). The appeal filed by the Revenue is accordingly dismissed. ITA NO. 2374/M/2010 A.Y. 2006-07 Assessee s appeal 36. The first grievance of the assessee relates to the disallowance of professional /legal charges of Rs. 3,03,000/-. 37. During the course of the scrutiny assessment proceedings, the AO noticed that the assessee has debited a sum of Rs. 3,24,000/- under the head legal/professional charges. On further probe, the AO found that Rs. 3,03,000/- was paid to K.G. Singhania and Rs. 21,000/- to Shri J.K. Monga. The AO found that the assessee has paid Rs. 3,03,000/- Singhania Co., in connection with matter disputed in the court of the small causes at Bombay with M/s. Indian Hotels Co. Ltd which is related to its group concern M/s. Regent Watch Jewellery Co. Pvt. Ltd. The AO was of the firm beli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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