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TMI Blog2016 (1) TMI 531X X X X Extracts X X X X X X X X Extracts X X X X ..... o to prove the genuineness of the transactions of purchase of gold jewellery by the assessee from them. Immediate payment could not be made to these persons because the receipt from M/s Nikki Jewellers House, the sole buyer of the assessee, was held up. Considering the entirety of the facts under consideration, we are of the considered opinion that the ld. CIT(A) was justified in deleting this addition. - Decided in favour of assessee. Addition on account of unsecured loans - CIT(A) deleted the addition - Held that:- There cannot be any addition under section 68 in respect of brought forward balances. Section 68 contemplates the addition in respect of amounts received during the year which are not properly explained by the assessee to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee furnished person-wise details to whom salary payments were made and also payment to ‘karigars.’ The assessee expressed inability to produce these persons because the business itself was closed down on 27.7.2009 and, thereafter, it was difficult to locate them. In our considered opinion, the amount of salary paid to the assessee’s employees and charges to outside ‘karigars’ is reasonable in the facts and circumstances of the instant case as the further corroboration by producing them for personal examination was not possible due to the closure of business. As such, the ad hoc disallowance of ₹ 3 lac made by the AO is held to be rightly deleted. As regards the remaining amount of ₹ 63,000/-, we find that this was a provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... succeeding year. The AO has recorded that despite giving adequate opportunity to produce these creditors, the assessee could produce only three persons, namely, Smt. Murti Devi, Smt. Joginder Kaur and Shri Satpal, whose statements were recorded on different dates. The AO noticed that they were persons of no means and, hence, the assessee s contention of having purchased gold jewellery from them, was not acceptable. Resultantly, he made addition of the said sum which came to be deleted in the first appeal. 4. We have heard the rival submissions and perused the relevant material on record. It is an admitted position that the assessee sold the jewellery purchased from these persons to M/s Nikki Jewellers House, from whom payment was delaye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent could not be made to these persons because the receipt from M/s Nikki Jewellers House, the sole buyer of the assessee, was held up. Considering the entirety of the facts under consideration, we are of the considered opinion that the ld. CIT(A) was justified in deleting this addition. This ground is not allowed. 5. Ground No.2 is against the deletion of addition of ₹ 14,19,200/- (correct amount given in the revised grounds) on account of unsecured loans. The facts apropos this ground are that the assessee had shown unsecured loans amounting to ₹ 14.19 lac from friends and relatives. On being called upon to produce these persons, the assessee submitted that a sum of ₹ 11,14,926/- represented brought forward unsecured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11,14,926/- were brought forward balances from the last year, then, no addition should be made for this amount in the current year. In the otherwise situation, the AO is free to examine the genuineness of these credits as per law. While examining this issue of the opening balances, the AO will also examine the assessee s contention about the sale of jewellery by Smt. Amarjeet Kaur during the year for a sum of ₹ 3.04 lac. This ground is, therefore, allowed for statistical purposes. 7. The last effective ground is against the deletion of addition of ₹ 3 lac on account of excessive salary paid to employees and ₹ 63,000/- on account of salary payable for the month of March, 2008. The assessee debited a sum of ₹ 7,56,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is reasonable in the facts and circumstances of the instant case as the further corroboration by producing them for personal examination was not possible due to the closure of business. As such, the ad hoc disallowance of ₹ 3 lac made by the AO is held to be rightly deleted. As regards the remaining amount of ₹ 63,000/-, we find that this was a provision created by the assessee towards salary for March, 2008 which was paid in April, 2008, which does not require disallowance. We, therefore, uphold the impugned order on this count. This ground fails. 9. In the result, the appeal is partly allowed for statistical purposes. stand dismissed. Decision pronounced in the open Court on 23rd Oct., 2015. - - TaxTMI - TMITax - In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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