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TMI Blog2022 (5) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... The ground No. 1 of the assessee is dismissed. Disallowance paid to mosque for providing free lunch to the assessee s employees - HELD THAT:- It is evident from the letter of mosque produced by the assessee that the free lunch used to be provided by the mosque labourers/artisan etc. in that area. The facility of the assessee happened to be in vicinity of mosque so those employees were availing free lunch provided irrespective whether those were employed in the facility of the assessee or not. By way of making payment of Rs.1,00,000/- by the assessee to the mosque it could not be established that the payment was a quid pro quo for the free lunch facility extended to the labourers/Karagirs of the assessee. The mosque was not under control of the assessee and free lunch was provided to the other persons and not exclusively to the labourers of the assessee. Therefore, in such circumstances, it could not be treated that the payment made by the assessee was wholly and exclusively for the purpose of the business of the assessee and accordingly the action of the Ld. CIT(A) in disallowing the ground is upheld. The ground No. 2 of the appeal of the assessee is accordingly dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as donation in books ) were incurred exclusively as staff welfare and are allowable as business expense u/s 37(1) of the Act. Ground 3 The Hon'ble CIT(A)-NFAC has erred in confirming disallowance of Rs 32,386/- being 20% of travelling expense of Rs 1,61,934/- on ground of personal use. Relief Claimed The appellant humbly submits that the travelling expenses of Rs 1,61,934/- are towards the air travel expenses for purchase and seeking orders for its embroidery and zari work business and not for any personal trips. Hence the addition made may please be deleted. 2. Briefly stated, the facts of the case are that the assessee was running a proprietorship business named and styled as M/s M.D. Nooruddin Zariwala and was engaged in the business of Zari (embroidery) and hand embroidery. For the year under consideration, the assessee filed return of income on 29.09.2012 declaring total income of Rs.14,87,140/-. The return of income filed by the assessee was selected for scrutiny and scrutiny assessment u/s 143(3) of the Income Tax Act, 1961 (in short the Act ) was completed by the Assessing Officer on 24.03.2015 at total income of Rs.74,62,320/- after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two creditors were also summoned in course of the remand proceedings and their statement was recorded wherein they both accepted to have advanced unsecured loans to Mr. M D Nooruddin Mondal. In view of this the loan amounts outstanding to these two parties (i.e. Rs. 13,71,596/- in respect of B K Art, and Rs. 33,74,886/- in respect of Karishma Art) cannot be held to be unexplained and hence directed to be deleted. 4.2.4 However in respect of the loan creditor Mrs. Firdos Mondal, against whom an outstanding credit of Rs.5,21,351/ is reflected in the accounts of the appellant, the appellant has not been able to furnish the address to the assessing officer even in course of the remand proceedings, as a result of which this creditor could not be examined. 4.2.5 In its response to the remand report, the appellant in its letter dated 7 September2020 has further contended as under : My relations with my wife gradually deteriorated and finally were totally shattered as a result I have no option but to divorce. Hence I have no contacts after diverse and do not know anything about her. As a result I was unable to give present address to the Ld. AO simply because I honestl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anding credit balance of Rs.5,21,351/. Since the genuineness of these transactions have not been established by the appellant, the assessing officer is directed to work out the peak credit in the account of the alleged loan creditor during the assessment year in question and treat the, same as unexplained cash credit. 5.3 Before us, also the assessee has not provided new address of M/s Firdos Mondal or filed documentary evidence in support of identity, creditworthiness or genuineness of the transaction in respect of loans received from M/s Firdos Mondal. Further, the Ld. CIT(A) has on perusal of the ledger account of M/s Firdos Mondal in the books of the assessee has directed to take peak credit for addition. In our opinion, the Ld. CIT(A) is justified in treating peak credit and unexplained cash credit as the assessee is liable to discharge his onus in terms of section 68 of the Act for all the credit money which is received from M/s Firdos Mondal during the year under consideration. The Ld. CIT(A) has treated the peak of all credits after adjusting the money returned to her. We do not find any error or perversity in the order of Ld. CIT(A) on the issue-in-dispute and accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5.8. It is evident from the letter of mosque produced by the assessee that the free lunch used to be provided by the mosque labourers/artisan etc. in that area. The facility of the assessee happened to be in vicinity of mosque so those employees were availing free lunch provided irrespective whether those were employed in the facility of the assessee or not. By way of making payment of Rs.1,00,000/- by the assessee to the mosque it could not be established that the payment was a quid pro quo for the free lunch facility extended to the labourers/Karagirs of the assessee. The mosque was not under control of the assessee and free lunch was provided to the other persons and not exclusively to the labourers of the assessee. Therefore, in such circumstances, it could not be treated that the payment made by the assessee was wholly and exclusively for the purpose of the business of the assessee and accordingly the action of the Ld. CIT(A) in disallowing the ground is upheld. The ground No. 2 of the appeal of the assessee is accordingly dismissed. 5.9 In ground No. 3, the assessee has contested disallowance of Rs.32,386/- out of travelling expenses being 20% of Rs.1,61,934/- on th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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