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TMI Blog2020 (2) TMI 789X X X X Extracts X X X X X X X X Extracts X X X X ..... Kalpesh K Gosalina incurred for compound wall, copy of bills and proof of payment made though cash book. The payment has been shown in balance sheet as capital expenditure. This expenditure is not claimed in Profit Loss Account. Therefore, disallowance of it is not justified. The assessee has filed copy of Adinath Textile AND cashbook of Adinath Textile. Hence, source of expenditure is explained and expenditure being capital in nature cannot be disallowed. Accordingly, this addition is deleted. - I.T.A No.2623/AHD/2016 - - - Dated:- 11-2-2020 - Shri Sandeep Gosain, Judicial Member And Shri O.P. Meena, Accoutant Member For the Assessee : Shri Sapnesh Sheth, CA For the Revenue : Mrs. Anupama Singla, Sr.D.R. ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was contended that the AO has taken adverse view of not producing Shri Paresh Kumar R Patel and Shri Ratilal V. Tank before the AO though the appellant had made his best efforts and the details furnished before the AO along with the confirmations. However, the Ld. CIT (A) observed that the AO issued notices to these lenders, but the notice, could not be served, and were returned as unserved. The AO found that Shri Kamlesh Dhariwal did not have sufficient funds to make said advance of ₹ 18,56,000 and failed furnished the source of cash deposits made in bank account just before the issuance of cheque to the appellant. In view of these facts, CIT (A) held that the assessee has failed to the established identity of the lenders int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause under the law the assessee can be asked to prove the source of credits in his books of accounts but not the source of source. The loan of ₹ 2, 75,000 taken from Paresh Kumar R Patel was repaid and he was residing abroad hence, his PAN could not be filed his PAN but his confirmation was filed. The learned counsel for the assessee relying on the decision in the case of CIT v. Ayachi Chandrasekhar Narsangji [2014] 42 taxmann.com 251 (Gujarat) connected that where Department had accepted repayment of loan in subsequent year, no addition was to be made in current year because of cash credit. 6. With regard to loan of ₹ 2 Lakh from Shri Ratilal V. Tank, the learned counsel for the assessee submitted that copy of confirmation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat no addition could be sustained on this account in the light of decision in the case of DCIT v. Rohini Builders [2002] 256 ITR 360 (Guj.)/[2003] 127 Taxman 523 (Guj) wherein the Hon`ble High Court has laid down that when the assessee has primarily discharged the initial onus laid on him in terms of section 68 by providing details to establish genuineness of transaction, identity and creditworthiness of depositors then the assessee is not expected to prove genuineness of cash deposited in bank account of those creditors because under the law the assessee can be asked to prove the source of credits in his books of accounts but not the source of source. In view of these facts, the addition of ₹ 18,56,000 is therefore, deleted. We furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat addition sustained by the CIT (A) were not justified. Hence, considering the facts and relying on the decision of Hon ble Gujarat High Court as referred above, these grounds of appeal of the assessee are allowed. Accordingly, addition of ₹ 23,31,00 loan and interest of ₹ 2,13,708 paid to lenders sustained by the CIT (A) is deleted. Accordingly, Ground No. 1 and 2 of appeal is allowed. 12. Ground No. 3: relating to interest of ₹ 47,103 being undisclosed income interest is not pressed before us by the learned counsel for the assessee, ex-consequenti, it is treated as dismissed as not pressed. 13. Ground No. 4 relates to confirming addition of ₹ 1,98,750 as unexplained investment / expenditure. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de is reflected in the cashbook and which has been incurred out of cash balances and appearing in the cashbook. The AO has not doubted the source of the expenditure. However, he made the disallowance which cannot be made as the expenses being capital in nature nor the assessee has claimed that such expenditure in the PLA account 17. Per contra, learned senior dear relied on the Ld. CIT(A) a 18. We have heard the rival submissions and perused the relevant material on record. We find that the assessee has filed copy of acknowledgement of return of income, contra confirmation for Kalpesh K Gosalina incurred for compound wall, copy of bills and proof of payment made though cash book. The payment has been shown in balance sheet as capi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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