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TMI Blog2015 (4) TMI 789X X X X Extracts X X X X X X X X Extracts X X X X ..... adverse comment with regard to un-verifiability of expenses, we do not find any reason to sustain any part of the disallowance on ad hoc basis. Thus, the finding of the Ld. CIT(A) which is completely based on remand report of the AO is upheld. Accordingly, the ground raised by the department stands dismissed. we find that in the P/L Account under the head "indirect income", amount of loans received of ₹ 45,387/- has duly been credited. Such a payment received is also corroborated by confirmation of account by M/s. S.A. Jewells Mumbai and Jayant I. Jain, wherein details of interest received and also the TDS deducted on such loans has been given. Thus, in wake of these evidences, it cannot be held that interest income shown by the assessee is unexplained income. Accordingly, the assessee's ground no. 3 is allowed.In the result the Cross Objection filed by the Assessee is partly allowed. - ITA No. 2471/Mum/2012, CO No. 84/Mum/2013, ITA No. 2471/Mum/2012 - - - Dated:- 20-2-2015 - N. K. Billaiya AM And Amit Shukla, JM,JJ. For the Appellant : Ms Natasha Mangat For the Respondent : Shri Sacchidanand Dubey ORDER Per: Amit Shukla: The aforesaid appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ress, hence the details required could not be furnished. The assessee thereafter, furnished all the relevant details and evidences explaining the entire transaction on which various additions were made by the AO. Ld. The CIT(A) accordingly forwarded all the documents and evidences to the assessing officer to submit his remand report. The assessing officer vide letter dated 03.11.2011 submitted his remand report which have been reproduced in the impugned appellate order. However, for the sake of ready reference the same are reproduced herein again:- The Ld. CIT(A) has sought the comments of the AO n the submissions made by the assessee/AR in the course of appellate proceedings. The comments of the AO are as under:- (a) The AR's letter dated 14.07.2011 states that the non attendance during assessment proceedings was due to the assessee having shifted from his old address 22. Sai Bhavan, 3rd floor. flat no 33, 12th Khetwadi Back Road, Mumbai-4, to his new address at 1501/A, Sankheshwar Darshan Tower, Behind Mazgaon Telephone Exchange, Lovelane, Byculla, Mumbai - 400010. It may be mentioned that there is nothing on record to indicate that the change in address was notified b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /-. An amount of ₹ 3,78,544/- has been returned as income from other sources by the assessee in his Rol. However, in the column appearing in the Rol pertaining to TDS details, the assessee has claimed that the said amount has been received from Aciel Creations (Rs 3.49,200/-) and one Vimalkumar F Jain (Rs 29,344/-). Therefore it is not clear how the entities from whom the amount has been shown to have been received in the RoI and the entities at (b) and (c) above are the same. (g) 20% of ₹ 5,11,926/- on a/c of expenses. The assessee has submitted the ledger account of the transaction pertaining to the expenses debited to the P L account. The AO in the assessment order has not specified the individual components which go to form the total of ₹ 5,11,926/-. The assessee has submitted a summary and ledger a/c's pertaining to an amount of ₹ 7,16,723/- debited to the P/L account. Therefore though the amount of ₹ 5,11,926/- is includible in the amount of ₹ 7,16,723/-it is uncertain as to which transactions the former amount corresponds to with regard to the submission now made by the assessee. 5. The Ld. CIT(A) after considering the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction cannot be doubted. She submitted that, once the loan which was taken in the earlier year have been held to be genuine by the AO in the remand proceedings, then interest paid on such loans cannot be disallowed, specially when TDS has been deducted on payment of the interest to the parties. Regarding disallowance of expenses also, she submitted that the amount of ₹ 5,11,926/- on account of which ad hoc disallowance of 20% has been made part of the indirect expenses of ₹ 7,16,723/- debited in the P L Account. Each and every head of expenses was duly explained with evidences and how they were incurred for the business purpose. Some of the major amount have been incurred through cheque. The assessing officer in the remand report has not given any adverse comment except for holding that it is not clear how the assessing officer in the assessment order has taken the figure of ₹ 5,11,926/-. Thus, the Ld. CIT(A) findings which is completely based on remand report of the assessing officer should be accepted. 8. We have heard the rival submissions and also perused the relevant material placed on record. It is an undisputed fact that none of the notices issued by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judicious approach adopted by the learned CIT(A) by way of a remand report after concluding the remand proceedings in the due course of law. 2. Under the facts and circumstances of case and in law; the learned AO erred in objecting the judicious view taken by the learned CIT(A) regarding the allowance of the legitimate interest expense in his speaking order. 3. Under the facts and circumstances of case and in law; the learned AO erred in making addition of ₹ 45,387 I-on account of unreconciled interest without appreciating facts and by brushing aside the submissions and explanations made during proceedings. 4. Under the facts and circumstances of case and in law; the learned AO has erred in initiating penalty proceedings u/s. 271(1)(c). 5. Under the facts and circumstances of case and in law; the learned AO has erred in levying interest u/s. 234B 234C of the Act. 10. Ground no. 1 and 2 are in support of the order of the Ld. CIT(A), hence they are treated as infructuous. 11. Regarding addition of ₹ 45,387/- on account of un-reconciled interest, learned counsel submitted that, before the assessing officer in the remand proceedings as well as befor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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