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TMI Blog2014 (11) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... of the source of capital to which AO has noted that Assessee neither gave any explanation nor furnished any documentary evidence nor the bank book or statement was made available to AO - CIT(A) by a cryptic order has allowed the claim of Assessee - the matter needs re-examination at the end of AO – thus, the matter is to be remitted back to the AO for fresh examination – Decided in favour of revenue. Addition of unsecured loan - Onus to prove the genuineness of the transaction – Held that:- Before AO Assessee did not file any confirmation to prove the identity creditworthiness and genuineness of the transaction - Before CIT(A) Assessee submitted that the lender of the amount was the father of the Assessee - the AO be granted an opportunity to examine the submission of the Assessee – thus, the matter is remitted back to the AO to verify the factual position as submitted by the Assessee before CIT(A) – Decided in favour of Revenue. - ITA No. 1734/AHD/2010 - - - Dated:- 11-7-2014 - G. C. Gupta, VP And Anil Chaturvedi, AM,JJ. For the Appellant : Shri B. L. Yadav, Sr. DR For the Respondent : Shri S. Kalara ORDER Per Anil Chaturvedi, A. M. 1. This appeal is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 80IB. 4. During the course of assessment proceedings, A.O noticed that Assessee has claimed deduction of ₹ 4,82,477/- u/s. 80IB of the Act. Assessee was asked to furnish the copy of permanent DIC certificate, Power Release order and the First Light Bill. Assessee filed provisional DIC certificate but failed to furnish the permanent DIC certificate. A.O noted that as per the power release order, power was released on 29.12.2004 and therefore he was of the view that in the absence of power, the production cannot be started and therefore the assessee could not have started production before 31.03.2004 which was the stipulated date as per the provisions of Section 80IB so as to be eligible for claiming deduction u/s. 80IB. A.O also noted that the Assessee was neither having any factory premises nor had paid any rent for hired premises. A.O was therefore of the view that manufacturing was not possible without existence of premises. In the absence of justification of its claim or proof in support of its contention, the claim of deduction u/s. 80IB was denied by the A.O. Aggrieved by the order of A.O, Assessee carried the matter before CIT(A). CIT(A) after considering the subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has neither owned his own factory premises nor has paid rent for the hired premises. Therefore non owing of the factory premises and also non payment of the rent supports the fact that the assessee had no factory premises on which the unit can start its business operations 1.6) On this, the appellant has submitted in the hearing the facts in writing that, in the absence the timely availability of power connection in the unit and the need for commencement of production activities; the requirements of power connection was met by hiring a DG set in the unit. The related expenses for running the DG set were also incurred in the relevant period. Power release order was obtained on 29.12.2004 and the same was produced before the AO, until then the work was continued by using the DG set. Further for the matter based on the availability of the factory premises for the commencement of the production activities, the appellant has raised his contention that the indebtedness does not over ride the facts and the legal agreement undergone. The appellant had entered into an agreement for hiring the premises on rent. A copy of the same was produced before the AO. The only matter was the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the year under appeal is the third year where the Assessee has claimed deduction under 80IB of the Act. It is also a fact that for A.Y. 04-05 05-06 the Assessee s claim for deduction under 80IB has been allowed by CIT(A) and the copy of the aforesaid orders are placed on record. Nothing has been brought on record by Revenue to demonstrate that against the order of CIT(A) for A.Y. 04-05 05-06, Revenue had preferred appeal before Tribunal and the order of A.O was upheld. With respect to the submission of the A.O that in the absence of power it cannot be said that Assessee could have started manufacturing process, the Assessee has submitted that its requirement of power was met through D.G sets. The aforesaid submissions of the Assessee has also not been controverted by Revenue by bringing any contrary material on record. In view of the aforesaid facts, we find no reason to interfere with the order of CIT(A). In the result, this ground of Revenue is dismissed. Ground no. 3 is with respect to the addition made on account of capital introduction. 8. A.O noticed that Assessee had introduced capital of ₹ 5,40,376/-. The Assessee was asked to submit evidence in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of CIT(A), Revenue is now in appeal before us. 10. Before us ld. D.R. submitted that during the assessment proceedings Assessee did not produce any evidence in respect of capital introduction nor gave any explanation to support the same. He therefore submitted that in such circumstances the A.O was fully justified in making the addition. He further submitted that CIT(A) did not call for any remand report from A.O and decided the issue on the basis of submission of the Assessee. He therefore submitted that the interest of justice, A.O be allowed an opportunity to examine the facts. He therefore submitted that the matter may be remitted to A.O for verification. The ld. A.R. on the other hand supported the order of CIT(A). 11. We have heard the rival submissions and perused the material on record. We find that during the year Assessee had introduced fresh capital of ₹ 5,40,376/-. The Assessee was asked to gave explanation in support of the source of capital to which A.O has noted that Assessee neither gave any explanation nor furnished any documentary evidence nor the bank book or statement was made available to A.O. We also find that CIT(A) by a cryptic order h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the fact in itself suffices the genuinity and justifies the lendings. Having served for quiet a considerable number of years of service, there is no point of suspect on the personal savings made by the lender of the appellant. 6.4 Referring to the facts of the case and analyzing the contentions of the appellant, the contention of the appellant seems to be correct, and thus, the appeal is wholly allowed. 6.5 As a result, with regard to ground no. 6 the appeal stands allowed. 13. Aggrieved by the order of CIT(A), Revenue is now in appeal before us. 14. Before us, ld. D.R. pointed to the findings of A.O that Assessee did not file any confirmation to prove the identity, creditworthiness and genuineness of transaction and therefore the A.O was fully justified in making the addition. He further submitted that the submission that the lender was the father of the Assessee was not made before A.O and CIT(A) also did not call for any remand report from the A.O. He therefore submitted that the submissions made by the Assessee before CIT(A) needs to be examined and the A.O be granted an opportunity to examine the factual position. The ld. A.R. on the other hand relied on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and when the bills are received by us. 4.3) Therefore the assessee has treated such expenditure on cash basis of accounting due to its irregular bill issuance. Thus, considering the genuineness of the facts and constraints as faced by the appellant; the appeal stands to be allowable. 4.4) Hence, with regard to ground no. 4, the contention of the appellant seems to be correct. I hereby delete the additions made in this context on the prior period electricity expenses. 4.5) Therefore on ground no. 4 of the appeal, the appeal is wholly allowed. 17. Aggrieved by the order of CIT(A), Revenue is now in appeal before us. 18. Before us, ld. D.R. relied on the order of A.O and on the other hand, ld. A.R. relied on the order of CIT(A). 19. We have heard the rival submissions and perused the material on record. We find, that CIT(A) after considering the factual position allowed the claim of Assessee. Before us, ld. D.R. could not controvert the findings of CIT(A). We apart from considering the amount of disallowance to be small find no reason to interfere with the order of CIT(A). Thus this ground of Revenue is dismissed. 20. In the result, the appeal of Revenue is partly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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