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TMI Blog2021 (7) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... d difference, if liable to be added to the total income of the assessee, then the same can be done in the year to which it relates and not in the year under consideration. At the time of bearing, the learned DR has not brought anything on record contrary to the argument advanced by the learned AR for the assessee. Accordingly we do not find any reason to uphold the finding of the authorities below. Disallowance being 20% of various vehicle expenses - HELD THAT:- As noticed that the AO has disallowed 20% of petrol expenses, depreciation: on motor car, interest on car loan, vehicle insurance and vehicle repairing since no log book was maintained to establish exclusive use of vehicle for business purposes. During the course of appellate proceedings, the appellant has not furnished any evidence to prove that he also owned other vehicle for personal use by him and his family members - personal use of the vehicle claimed in the business, cannot be ruled out and accordingly disallowance made by the Assessing Officer which is very reasonable, is sustained. Disallowance at the rate of 20% is on the higher side and prayed to make some token disallowance in the interest of justice - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before passing the impugned order. This action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 6. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld.AO in levying interest u/s.234A/B/C of the Act. 7. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld.AO in initiating penalty u/s.271(1)(c) of the Act. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. 3. The assessee in ground No. 1 has raised the issue that the learned CIT (A) erred in confirming the order of the AO by sustaining the addition of ₹ 28,387.00 with respect to insurance claimed received against the vehicle repairing expenses. 4. The assessee in the present case is an individual and engaged in the business of trading in electric items. The assessee in the year under consideration has claimed vehicle repairing expenses of ₹ 36,919.00 in his profit and loss account. However the AO found that the assessee has received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me and added to the total income of the assessee. 12. Aggrieved assessee preferred an appeal to the learned CIT (A) who reduced the addition made by the AO to ₹ 43,759.00 by observing as under: 4.3 Ground No.3 pertains to addition of ₹ 1,40,041/- being the excessive credit balance shown in the name of Canbara international Pvt. Ltd. The Assessing Officer noticed that in the Balance Sheet, credit balance of ₹ 2,35,643/- was shown, but the Ledger revealed credit balance of ₹ 95,602/-. The appellant has furnished a detailed explanation stating the there are two accounts in the name of Canbara International Pvt. Ltd. As details below:- /Canbara International Pvt. Ltd. Credit balance ₹ 1,40,040. 60 Canbara International Pvt. Ltd, (Ahd) -do- ₹ 95,602.70 Total ₹ 2,35,643. 30 However, at the time of assessment proceedings, the Assessing Officer has V; compared only one Ledger Account. During the course of appellate proceedings, the Ld. Authorized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y creditor on account of opening balance which were carried forward from the preceding year. Therefore such difference in the opening balance cannot be added to the total income of the assessee in the year under consideration. The impugned difference, if liable to be added to the total income of the assessee, then the same can be done in the year to which it relates and not in the year under consideration. At the time of bearing, the learned DR has not brought anything on record contrary to the argument advanced by the learned AR for the assessee. Accordingly we do not find any reason to uphold the finding of the authorities below. Hence, the ground of appeal of the assessee is allowed. 17. The next issue raised by the assessee is that the learned CIT (A) erred in confirming the order of the AO by sustaining the addition of ₹ 12,60,000 under section 68 of the Act. 18. The AO during the assessment proceedings found that the assessee has shown sundry creditors amounting to ₹ 29,50,024.00 but failed to justify the nature of credit appearing in the financial statements against their names. Thus in the absence of any reply from the side of the assessee, the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehemently supported the order of the authorities below. 25. We have heard the rival contentions of both the parties and perused the materials available on record. With respect to the addition of ₹90,000 in respect of Bhavin D. contractors, we note that such addition was not subject matter of dispute before the AO. This fact can be verified from the copy of the ledger of the party placed on page 57 of the paper book. Admittedly, such addition can be made by the learned CIT (A) only after affording the opportunity of being heard to the assessee on account of such enhancement. But the learned CIT (A) has not done so and therefore such enhancement in the addition is not sustainable. Accordingly we direct the AO to delete the addition of ₹90,000 in respect of Bhavin D. contractor. 25.1 Regarding the addition of ₹ 11,70,000 in respect of Shri Suketu D. Contractor, we note that such party is the son of the assessee and therefore it was within the reach of the assessee to furnish the creditworthiness of the party. But the assessee has not furnished satisfactory and necessary documents in support of credit worthiness of the party. However, we note that the learned CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us submitted that the addition has been made by the authorities below on presumption basis without pointing out any defect in the audited books of accounts. As such under the law, there is no provision for making the disallowance on ad hoc basis. 30.1 The learned AR also contended that if the addition with respect to the insurance claim is confirmed as raised in the ground No. 1 then it will lead to the double addition. 30.2 The learned AR alternatively contended that the disallowance at the rate of 20% is on the higher side and prayed to make some token disallowance in the interest of justice. 31. On the other hand, the learned DR vehemently supported the order of the authorities below. 32. We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion we note that the AO has made the disallowance at the rate of 20% of the following expenses: Petrol expenses ₹ 45,340/- Depreciation on motor car ₹ 65,939/- Interest on car loan ₹ 9,519/- Vehicle insuran ..... X X X X Extracts X X X X X X X X Extracts X X X X
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