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TMI Blog2018 (5) TMI 1598X X X X Extracts X X X X X X X X Extracts X X X X ..... time of assessment proceedings before the AO - thus AO was justified in adding ₹ 2,00,000/- on account of unexplained share capital - Decided against the assessee Chargeable of interest u/s 234B - Held that:- as per the decision of Hon’ble High Court in the case of Ajay Prakash Verma in TA no. 38 of 2010 reported in 2013(1) TMI 140, AO is directed to modify the interest calculation u/s 234B - appeal is partly allowed. - ITA No.175/Ran/2016 - - - Dated:- 24-5-2018 - SHRI N.S.SAINI, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER For The Revenue : Shri A.K.Mohanty, JCIT For The Assessee: Shri Pawan Kumar Agrawal , CA ORDER Per Pavan Kumar Gadale, JM: This is an appeal filed by the Revenue against the order of CIT(A), Jamshedpur, dated 28.03.2016, for the assessment year 2011-12, wherein the Revenue has raised the following grounds of appeal :- ( 1) On the facts and circumstances of the case, the Ld.CIT(A) erred on fact and in law in deleting the addition of ₹ 43,43,805/- made by the Assessing Officer on account of estimated disallowance of expenses. ( 2) On the facts and circumstances of the case, the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not point out with any new material facts from the findings of the CIT(A) nor controvert the findings of the CIT(A) in this regard. The relevant observations of the CIT(A) are as under :- 4.2 I have gone through the order of the learned AO as well as the written submission made by the appellant. Having regard to wide powers available u/s 148, very initiation of proceedings made under said section by issuing notice cannot be held to be invalid merely stating that it was issued after passing of 7 days from the date of survey operation. From the order of the AO it is not found that the assessee objected to issue of notice which needs to be disposed off in the light of decision of Hon Tale Supreme Court in the case of M/s GKN Driveshaft Co. Ltd. but is also seen that the appellant has attended the course of re-assessment proceedings. Therefore objection to issuance of notice u/s 148 is over rule and appeal on this ground is dismissed. Ground no. 3 and 4 pertains to disallowance of ₹ 43,43,805/-. 5.1 During the course of assessment proceedings the AO has dealt this fact which is being reproduced as below: In the accounts as submitted to this office, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the result of the said enquiry of the some persons to whom expenses were paid were not found correct and in respect of expenses 2% of the total expenditure debited into Profit Loss Account of ₹ 21,71,90,173/- of ₹ 43,43,804/- are disallowed on casual manner. The disallowance made is unjustified, illegal and most incorrect. For that the appellate has maintained proper Books of Accounts and accounts have been audited by registered Chartered Accountants u/s 44AB of Income Tax Act, 1961 as well as under statutory compliance of Companies Act. Expenses incurred by the appellant are fully verifiable, all bills and vouchers are properly kept by the appellant. Expenses were incurred by banking channel in most of the cases. No lump sum disallowance as such is called for or can be made out of the various expenses claimed which were fully verifiable. For that payment of Salary Wages, EPF, ESIC, Filing fees paid to ROC, Bank Interest on Car loan, Telephone Expenses, Vehicle hire charges, Audit fees, Bonus, Depreciation, Director's Remuneration, Dog handling charges are fully verifiable and cannot be disallowed on ad-hoc basis. Most of the expenses were made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention is reproduced as under:- Further learned A.O has made addition of ₹ 3,01,703/- on account of difference in FDR as per Bank and as per Balance Sheet of the appellant was explained properly, as such addition made by the learned A.O by observing that explanation is not acceptable is most illegal and arbitrary. It is not understood under which provision of the Income Tax Act, this addition was made. The learned A.O has issued questionnaire in this regard vide letter no:- ACIT/JSR/CIR-l/2013-14/2013 dated 6th March, 2014, this letter was served on 6th March 2014 at 01:30 P.M and asked to comply the query on the same date by 05:00 P.M. Your honour may understand how the learned A.O has given pressure to the assessee. Appellant has to provide a reasonable time to explain the query on natural justice. We are enclosing herewith copy of letter issued by learned A.O and explanation given by the appellant on the query vide letter dated 10th March 2013, which were self explanatory on the issue. Thus appellant has explained the query properly. Hence addition of ₹ 3,01,703/- on account of difference in FDR is most illegal and unjustified, hence are liable to be deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s count. The shares were purchased by them, allotted to them and the money was received from the company through banking channel. The addition made, therefore, is illegal and incorrect. On the above fact and circumstances it is pray before your honour, that addition were made in most arbitrary and incorrect way, hence is liable for deleted in toto. 7.3 I have gone through the order of the learned AO as well as the written submission made by the appellant. The appellant have enclosed the company master data in his submission, but failed to provide these requisite details at the time of assessment proceedings before the AO. As such AO was justified in adding ₹ 2,00,000/- on account of unexplained share capital. 8. Ground no. 10 relates to chargeable of interest u/s 234B of the IT Act. 8.1 The AO is directed to modify the interest calculation u/s 234B of the IT Act following the decision of Hon ble High Court in the case of Ajay Prakash Verma in TA no. 38 of 2010 reported in 2013(1) TMI 140. 9. In the result, the appeal is partly allowed. 8. Therefore, considering the overall aspects that the CIT(A) having considering the submissions of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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