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TMI Blog2014 (11) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... ly on the ground that there was no evidence to suggest that Shri S.Saiarah has subsequently paid the amount of ₹ 9,50,000 to Shri Ajay Agarwal - the reason given by the Assessing Officer as well as other reasons given by him to reject the claim of the assessee were totally irrelevant, as the explanation of the assessee of having repaid the amount to Shri S. Sariah on behalf of Shri Ajay Agarwal was duly supported by the confirmation letter issued by Shri Ajay Agarwal himself, wherein he accepted that the payment was made by the assessee to Shri S.Saraiah as per his instructions - it was not a case of any unexplained credit, as alleged by the AO, and the CIT(A) was fully justified in deleting the addition made by the AO – Decided against revenue. Addition u/s 40A(3) – Held that:- CIT(A) was rightly of the view that the disallowance made by the AO u/s 40A(3) observing that there was no evidence produced by the assessee to establish that the amount against purchase of bardan was paid by demand draft - there is no evidence placed even to support and substantiate the same - the payment made for the purchase in cash is covered by the exceptions given in Rule 6DD(e)(i) – He has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment completed under S.143(3) vide order dated 30.12.2011. 5. Against the order passed by the Assessing Officer under S.143(3), an appeal was preferred by the assessee before the learned CIT(A), disputing inter-alia the addition of ₹ 26,10,000 made by the Assessing Officer on account of unexplained expenditure and after considering the submissions made by the assessee as well as the material available on record, the learned CIT(A) deleted the said addition made by the Assessing Officer for the following reasons given in paragraphs 4.2 and 4.3 of his impugned order- 4.2 The assessee withdrew a sum of ₹ 26,10,000 from his bank account between the period 10.04.2008 to 18.04.2008. The bank balance as on 31.03.2008 and 01.04.2008 in the books of the assessee was shown as ₹ 9,630/-, i.e. the available balance and the withdrawal of ₹ 26,10,000/- was not taken to be part of the business transactions of the assessee at all. It is relevant to appreciate that the assessee is an individual and has an identity distinct from that of his proprietorship. It is possible for the assessee to withdraw funds from his business for his personal purposes in which situation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings, it was noticed by the Assessing Officer that the assessee has received a sum of ₹ 9,50,000 from Shri Ajay Agarwal during the year under consideration and the same was repaid on 15.12.2008. On further verification, the Assessing Officer found that the amount of ₹ 9,50,000 claimed to be paid by the assessee to Shri Ajay Agarwal on 15.12.2008 was actually credited to the account of one Shri S.Saraiah. In this regard, the explanation offered by the assessee was that the amount of ₹ 9,50,000 was paid to Shri S.Sariah as per the instruction of Shri Ajay Agarwal and the same was subsequently paid by Shri Sariah to Shri Ajay Agarwal. A confirmation letter issued by Shri Ajay Agarwal was also field by the assessee to support and substantiate his explanation. The Assessing Officer however, did not accept the explanation of the assessee for the following reasons- (i) The assessee was having sufficient balance in his account and he could have been directly made the payment to Sri Ajay Agarwal. (ii) The assessee with a clear intention to suppress the receipt has recorded the entry as paid to Sri Ajay Agarwal. (iii) There is no evidence to suggest that Sri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, do not lead to the conclusion drawn by him. The addition made by him is therefore, deleted and this ground is allowed. 10. We have heard the arguments of both the sides and also perused the relevant material on record. It is observed that the amount of ₹ 9,50,000 received form Shri Ajay Agarwal was claimed to be repaid by the assessee as per his instruction to Shri S.Sariah and this claim was duly supported by the confirmation letter issued by Shri Ajay Agarwal. The Assessing Officer however did not accept the explanation offered by the assessee on this issue mainly on the ground that there was no evidence to suggest that Shri S.Saiarah has subsequently paid the amount of ₹ 9,50,000 to Shri Ajay Agarwal. As rightly held by the learned CIT(A), this reason given by the Assessing Officer as well as other reasons given by him to reject the claim of the assessee were totally irrelevant, as the explanation of the assessee of having repaid the amount in question to Shri S.Sariah on behalf of Shri Ajay Agarwal was duly supported by the confirmation letter issued by Shri Ajay Agarwal himself, wherein he accepted that the payment was made by the assessee to Shri S.Sar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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