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TMI Blog2016 (4) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... wn by the assessee as income. In our considered opinion, since the amount of FDR interest shown by the assessee as income is very much close to even the estimation by the Assessing Officer and CIT(A) in the absence of details and this is the claim of the assessee that interest income was accounted for by the assessee on actual basis, we hold that in the facts of the present case, the addition upheld by CIT(A) is not justified. We, therefore, delete the same - Decided in favour of assessee Addition being increase in Security Deposits under the head "Current Liabilities" over the last year - Held that:- In the copy of ledger account of Shiva Steel, Lucknow customers with opening debit balance of ₹ 1,25,939/- and there is no corresponding credit entry available in its customer account on account of transfer from Shiva Steel security deposit on 16/04/2007. Hence, it is noted that this contention that security deposit is transferred to the customer account is not being supported by the copy of ledger account of Shiva Steel, Lucknow customer. Regarding the second party i.e. Madhyeshiya Traders, the copy of ledger account of Madhyeshiya Traders of the customers is available on pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epairing expenses cannot be disallowed. Regarding this objection that the details and evidences are not produced, it has been submitted before CIT(A) as per written submissions dated 25/03/203 that the ledger accounts of expenses under this head are being produced and in the earlier year, there was no disallowance under this head and all the expenses are vouched but there is no finding given by CIT(A) that these assertions of the assessee in the written submissions are incorrect. Hence, ad hoc disallowance under this head is not justified. We, therefore, delete the same - Decided in favour of assessee Disallowance being 40% of the expenses under the head salary, wages and bonus - Held that:- As per the audited accounts available , the details of employees remuneration and benefits of the current years and preceding years are available on page 30 of the paper book and as per the same, in the present year, the amount claimed is ₹ 448.55 lac as against the claim of ₹ 439.38 lac in the preceding year. As per the Assessing Officer in the assessment order, the claim under this head was ₹ 609.08 lac but this is the explanation of the assessee before CIT(A) that this a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns u/s 68 of the Income Tax Act, 1961. 4. It was submitted by Learned A. R. of the assessee that on page No. 89 of the paper book is confirmation from Shri Deoki Nandan Jhunjhunwala, father of Ms. Amita Jhunjhunwala for receipt of unsecured loan of ₹ 2.40 lac along with the PAN of lender. He also submitted that list of unsecured loan of ₹ 15,23,787/- for which the addition was made by the Assessing Officer has not been made available to the assessee. At this juncture, the Bench pointed out page No. 159 of the paper book where the assessee has provided the details of this amount of ₹ 15,23,787/- and as per said detail, the amount of fresh loan received during the present year is ₹ 35,14,887.63 and the addition was made by the Assessing Officer of a lesser amount of ₹ 15,23,787/- only. In reply, it was submitted that the addition was made by the Assessing Officer of the amount of difference between the closing balance of unsecured loan and the opening balance of unsecured loan and since various amounts were received during the present year and repaid during the present year to the same person, it does not come out as to the addition was made in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the assessment order, the Assessing Officer considered the amount of FD at ₹ 31.51 lac as against actual of ₹ 21.51 lac but in the remand proceedings, the Assessing Officer has accepted this mistake and therefore, CIT(A) has granted relief to that extent. He further submitted that the Assessing Officer has estimated the interest amount @10% of the closing balance of the FD but the assessee has accounted for the interest on actual basis and the difference is very small of ₹ 27,107/- as against income already accounted for by the assessee of ₹ 1,87,983/- and therefore, the addition upheld by CIT(A) should also be deleted. 9. Learned D. R. of the Revenue supported the order of learned CIT(A). 10. We have considered the rival submissions. We find that as per the assessment order, the assessee did not furnish the details of FDR being the date of FDR and the rate of interest and therefore, the Assessing Officer estimated the income from FDR @10% of the closing balance in FDR with bank. In the assessment order, the Assessing Officer wrongly proceeded with the amount of FDR at ₹ 31.51 lac saying that this is the amount of FDR balance as on 31/03/200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their repayments/adjustments are made. It was also explained that the major amount in this account is of M/s Shiva Steel and these are regular transactions with this party. It was also explained that the customer account of this party is separately maintained and the amount of security deposit taken in financial year 2006- 07 relevant to assessment year 2007-08 was adjusted in the customer account of this party on 16/04/2007 i.e. in the previous year relevant to assessment year 2008-09. He submitted that under these facts, the addition made by Assessing Officer and confirmed by CIT(A) is not justified. 15. Learned D. R. of the Revenue supported the orders of the authorities below. 16. We have considered the rival submissions. We find that as per the details available on page No. 161 of the paper book, fresh security deposit of ₹ 5.52 lac was received during present year including ₹ 5 lac from Shiva Steel and ₹ 50,000/- from Madhyeshiya Traders and ₹ 2,000/- from Anil Kumar Mishra. Copy of account of Shiva Steel is available on pages 167-170 of the paper book. On Page No. 167 of the paper book is its security deposit account for the current year showin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank statement and other relevant documents. In this regard, he submitted that on pages 85 to 88 of the paper book is copy of written submissions filed before the CIT(A) and in the same, complete details have been given by the assessee regarding the claim of interest and finance charges of ₹ 1,15,52,163.35 which are including ₹ 94,29,416/- being interest on PNB CC account, ₹ 10,98,068.35 being interest of ICD with Fuel Corporation of India and Gateway Leasing Ltd., ₹ 96,219/- being interest paid to PNB Padrauna, ₹ 3,681/- being interest paid to LIC Padrauna, ₹ 6,55,076/- being paid to bank for discounting of loan cheques and ₹ 2,69,903/- being other interest paid on CST/PF/ESI/UPTT etc. Regarding the interest on PNB CC account, it was submitted that the evidence is the bank statement of PNB CC account. He also submitted that the disallowance was made u/s 43B but the assessee has furnished evidence that the interest was already paid and in support of this, ledger account of interest on PNB CC account is available on page 96 to 99 of the paper book and ledger account of interest on Gateway Leasing Ltd. ICD is available on page No. 100 of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining amount of interest and discounting charges, section 43B is not applicable and therefore, disallowance made by Assessing Officer is not justified. We, therefore, delete the same. Ground No. 7 is allowed. 21. Ground No. 8, 9 and 10 are in respect of some ad hoc disallowance and therefore, these are decided together. These grounds are as under: 8. Because the learned first appellate authority ought not to have confirmed disallowance of ₹ 18,33,669/- being 25% of the expenses on repair maintenance of plant machinery, building and others. 9. Because the learned first appellate authority ought not to have confirmed addition of ₹ 2,43,63,252/- being 40% of the expenses under the head Salary, wages and Bonus . 10. Because the learned first appellate authority ought not to have confirmed addition of ₹ 2,00,00,000/- out of various heads of expenses on the plea of preventing any possible leakage in the accounts of the assessee. 22. It was submitted by Learned A. R. of the assessee that the copy of written submissions filed before CIT(A) on 25/03/2013 is available on pages 13 to 18 of the paper book. It is submitted that the same arguments o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance under this head is not justified. We, therefore, delete the same. Ground No. 8 is allowed. 25. Regarding ground No. 9 i.e. regarding addition of ₹ 2,43,63,252/- being 40% of the expenses under the head salary, wages and bonus, we find that it is stated by the Assessing Officer in the assessment order that under the head salary, wages bonus, the assessee has claimed ₹ 609.08 lac, which is almost double as compared to preceding year but the purchase of raw material, manufacturing expenses, sales are decreased during the present year and since no details are filed, 40% disallowance is made. In this regard, it was submitted by the assessee before CIT(A) that the Assessing Officer has already disallowed an amount of ₹ 240.47 lac on account of gratuity vide Para 5 of the assessment order. He has also submitted that the expenses under the head employees remuneration and benefits, salary, wages and bonus are inclusive of this amount and if it is excluded then the expenses under this head will be ₹ 368.86 lac only, which is less than the last year's expenses. Hence, no disallowance is called for. We find force in this contention of Learned A. R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 lac in the preceding year. Therefore, we feel that no disallowance under these heads is called for in the facts of the present case. We, therefore, delete the same. Ground No. 10 is allowed. 27. Ground No. 11, 12 and 13 are as under: 11. Because the learned first appellate authority ought not to have sustained/disallowances of ₹ 20,81,631/- being the expenditure under the head Contribution to Provident and Other Funds . 12. Because the learned first appellate authority ought not to have confirmed addition of ₹ 1,21,52,262/-. 13. Because the learned first appellate authority ought not to have confirmed inclusion of Rs. ₹ 49,30,942/- being Extraordinary income to the total income of the assessee. 28. Ground No. 11 12 were not pressed by Learned A. R. of the assessee and therefore, these grounds are rejected as not pressed. Regarding ground No. 13, it was submitted that this amount of extraordinary income was shown in the provisional account but not in the audited account available on pages 19 to 40 of the paper book and therefore, the addition made by the Assessing Officer and confirmed by CIT(A) is not justified. 29. Learned D. R. of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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