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TMI Blog2015 (3) TMI 1015X X X X Extracts X X X X X X X X Extracts X X X X ..... unt is paid by A to B and the A records transaction in his books of account on the date of making of draft or issuance of cheque and B records the same in his books of account later on at the time of its actual receipt. However, the position in the instant case is converse inasmuch as the payer is claiming to have made payment on 4.4.2007 and payee, that is the assessee, is showing to have received this amount on 30.3.2007. Under such circumstances, we cannot accept the genuineness of loan transaction to the tune of ₹ 46.10 lac unless the facts are properly considered and appreciated. Overturning the impugned order on this score, we send the matter back to the file of AO for verifying the genuineness of credit to the extent of ₹ 46.10 lac claimed to have been received from S.V. Liquor India Ltd. - Decided in favour of revenue for statistical purposes. For receipts from Mudra Ceramics Pvt. Ltd.Though apparently there is no separate entry for any loan and advance of ₹ 15 lac appearing on the asset side of the balance sheet of the assessee, but the ld. AR contended that this amount may have been included in the list of Loans and advances. It was attempted to show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e no question of applying section 40(a)(ia) of the Act. The AO did not make any disallowance in respect of transportation charges paid by the assessee to M/s Jyothi Transport. It, therefore, becomes abundantly apparent that the assessee deducted tax at source from the freight payments wherever it was required under law. In view of this position, we uphold the impugned order deleting the disallowance made u/s 40(a)(ia) of the Act. - Decided in favour of assessee. Disallowance of service tax - assessee did not file proof of payment of service tax before filing the return - CIT(A) deleted the disallowance - Held that:- In the absence of any adverse comments made by the AO and the fact that the assessee did pay service tax before the close of the year itself, we hold that the ld. CIT(A) was right in deleting this addition. - Decided in favour of assessee. - ITA No.1251/Del/2011 - - - Dated:- 20-3-2015 - Shri R.S. Syal And Shri C.M. Garg JJ For the Appellant : Shri C.S. Agarwal, Sr. Advocate Shri Ravi Pratap Mall, Advocate For the Respondent : Shri T. Vasanthan, Sr. DR ORDER Per R.S. Syal, AM: This appeal by the Revenue is directed against the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eved against the admission of additional evidence in terms of Rule 46A inasmuch as there is no ground challenging the admission of additional evidence by the ld. CIT(A). The reason appears to be the ld. CIT(A) calling and the AO sending remand report on the merits of the additional evidence filed by the assessee. The Revenue, on this issue, is aggrieved against the deletion of addition of ₹ 5,66,44,000 made by the AO. 6. We have heard the rival submissions and perused the relevant material on record. It is noticed that the addition of ₹ 5.66 crore made by the AO u/s 68 comprises of amounts received by the assessee from four different entities. We will deal with these four entities one by one for determining their genuineness or otherwise. i) Mudra Exports. 7.1. The AO picked up the figure of ₹ 3,35,34,000/-, being the amount of loan or deposit taken by the assessee from Mudra Exports, by considering an Annexure to the tax audit report, a copy of which is available on page 201 of the paper book. The Annexure to the tax audit report showing receipt , inter alia, of ₹ 3,35,34,000/- also shows Repayment of loan to Mudra Exports to the tune of ₹ 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee from the debtors of Mudra Exports are duly recorded by Mudra Exports in its books of account. 7.3. In view of the above overwhelming evidence filed by the assessee establishing the genuineness of the amounts received by the assessee from or on behalf of Mudra Exports, we have no hesitation in upholding the impugned order deleting this addition. (ii) S.V. Liquor India Ltd. 8. The assessee showed a receipt of ₹ 1,96,10,000/- from S.V. Liquor India Ltd., in the same Annexure to its tax audit report, as the amount of loan or deposit taken or accepted. The AO picked up this amount from the said Annexure of the audit report. The next column in the Annexure shows the amount of repayment to M/s S.V. Liquor India Ltd., at ₹ 2.47 crore. Page no. 88 of the paper book is a copy of the assessee s account in the books of S.V. Liquor India Ltd., which shows, inter alia, debit entries of ₹ 50 lac each on different dates. Page 86 of the paper book is the account of S.V. Liquor India Ltd. in the books of the assessee which, apart from showing three receipts of ₹ 50 lac each, also shows a sum of ₹ 46,10,000/- received on 30.3.2007 with the remarks Being a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order on this score, we send the matter back to the file of AO for verifying the genuineness of credit to the extent of ₹ 46.10 lac claimed to have been received from S.V. Liquor India Ltd. iii) Mudra Ceramics Pvt. Ltd. 9. The AO made addition for a sum of ₹ 15 lac on the basis of the entry made in the same Annexure to the tax audit report showing receipt of loan of the said amount from Mudra Ceramics Pvt. Ltd. The ld. CIT(A) deleted this addition by observing that the assessee had, in fact, advanced loan to Mudra Ceramics Pvt. Ltd., for this sum instead of receiving the same and, hence, the same ought not to have been added. During the course of proceedings before us, we required the AR to show the advancing of loan of ₹ 15 lac to Mudra Ceramics Pvt. Ltd., from the balance sheet of the assessee. Though apparently there is no separate entry for any loan and advance of ₹ 15 lac appearing on the asset side of the balance sheet of the assessee, but the ld. AR contended that this amount may have been included in the list of Loans and advances. It was attempted to show that this payment is a part of the several transactions undertaken by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y previous year the assessee is benefitted by way of remission or cessation of the amount for which it incurred loss or expenditure etc., earlier. To put it simply, section 41(1) can be attracted only when a trading liability for which deduction was claimed earlier, ceases to be payable. Obviously, receipt of share application money can, by no standard, be construed as a trading liability for which the assessee could have been allowed deduction in the past and its later cessation has resulted into income. As such, the application of section 41(1) is ruled out. 11.3. It is noticeable from the assessee s balance sheet that a sum of ₹ 15.80 lac is appearing as share application money for the year ending 31.3.2007 and equal amount is appearing in the balance sheet for the immediately preceding year ending 31.3.2006. This shows that the amount of ₹ 15.80 lac was received by the assessee in an earlier year and not in the previous year relevant to the assessment year under consideration. As such, this amount cannot be considered as income in terms of section 68 of the Act because there is no fresh credit appearing on the books of the assessee during the year on this account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays. The assessee filed a copy of bill showing that the payment was made to the Railway Division of the Port Trust for freight charges relating to hired wagons. Since this payment is also towards carriage of goods by Railways, it would not attract section 194C. As regards the remaining amount disallowed by the AO, the assessee filed evidence before the ld. CIT(A) showing deduction of tax at source @ 2.24% amounting to ₹ 8,258/- in respect of freight payment amounting to ₹ 3,68,015/- made to M/s Lakshmi Transport. Since the assessee deducted tax at source from the payments made to Lakshmi Transport, there can be no question of applying section 40(a)(ia) of the Act. The AO did not make any disallowance in respect of transportation charges paid by the assessee to M/s Jyothi Transport. It, therefore, becomes abundantly apparent that the assessee deducted tax at source from the freight payments wherever it was required under law. In view of this position, we uphold the impugned order deleting the disallowance made u/s 40(a)(ia) of the Act. 13. The last ground is against the deletion of disallowance of service tax amounting to ₹ 82,224/-. The AO made this disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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