9911796707
TMI Blog2022 (12) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... . We find that once the payment in subsequent assessment year has been accepted in the scrutiny assessment as genuine, the same cannot he left as treated in-genuine. Moreover, the assessee has made TDS against such payment of labour contractors wherever applicable. In view of the aforesaid discussion, we do not find any reason to devoid the findings of Ld. CIT(A). This ground of Revenue s appeal is dismissed. Nature of expenses - Loan Processing Charges - CIT-A deleted the addition - HELD THAT:- CIT(A) accepted the contention that such expenses were revenue in nature and allowable under section 37(1) of the Act. Such expenditure was paid through account payee cheque and expenditure were incurred for the purpose of assessees good business. We find that the contention of assessee throughout the proceedings that loan processing charges were borne by assessee to attract the buyers book flats and Assessing Officer has not investigated the fact either bank or financial institutions or from the buyers whether the loan processing charges borne by assessee. The details fact alleged buyers and bank may have been available with the AO. No investigation is made either from the buyer or fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrutiny. During the assessment, Assessing Officer noted that assessee has shown credit against the thirty different persons on account of purchase of materials or labourers etc. The Assessing Officer also noted that assessee has not paid any amount during the relevant financial year. The assessee was asked to furnish the name of the persons, PAN and details thereof. The Assessing Officer recorded that assessee has not provided addresses of the creditors in the list, so Assessing Officer sent notice under section 133(6) as per the given addresses on the respective PAN. The Assessing Officer recorded that only five creditors submitted their confirmations. It is further noted by Assessing Officer that partner of assessee was asked to submit the addresses of their creditors. The partner of assessee furnished addresses of such creditors. Thereafter the Assessing Officer again issued notices under section 133(6) of the Act which were returned back with the remarks of Postal Authority no such person / incomplete address / not known and in some cases no responses were made. On the basis of such report in response to notice under section 133(6) of the Act, the Assessing Officer issued de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Material with labour 13 Jai Shihori Krupa Carting 7,85,701 7,85,701 Carting/material purchase Total 2,74,57,986 2,74,57,986 3. The Assessing Officer further recorded that assessee has debited expenses of Rs.16,27,148/- on account of loan processing charges. On perusal of details in return of income, the Assessing Officer noted that there is no secured loan reflected therein. The assessee was asked to explain the fact. The Assessing Officer noted that assessee has not provided any details of such loan processing charges. Accordingly, entire expenses / loan processing charges of Rs.16,27,148/- was disallowed and added to the income of assessee. 4. Aggrieved by the addition in the assessment order, the assessee filed an appeal before the Ld. CIT(A). Before Ld. CIT(A), the assessee filed detailed written submission. The submission of assessee is recorded in para-4 of the order of Ld. CIT(A). The assessee in its submission stated that assessee is a partnership firm e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm could not automatically be presumed as bogus / in-genuine and no tangible evidence was available with the Assessing Officer against the real and factual trading liabilities of assesseefirm. The assessee further stated that till 31.03.2014, the assessee incurred of Rs.9,31,63,790/- for construction of residential units / flats which shown as work-in-progress in the audited balance-sheet. The construction cost till the end of relevant year was for the purchased of land and its development expenses, labour charges, cutting expenses, material purchase expenses, labour with material expenses and other indirect expenses shown in the audited balance-sheet. All the details were provided to Assessing Officer and Assessing Officer made addition under section 68 and not under section 69C of the Act thereby found genuine real and direct expenses though the books of assessee were not rejected. The Assessing Officer accepted the liability as a trading result because some of the parties have not responded to the notice under section 133(6) of the Act. The Assessing Officer presumed that the trading liability as ingenuine cash credit. The assessee submitted that they have furnished complete n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted by Assessing Officer in assessment proceedings under section 143(3) of the Act. The assessee also made TDS on payments wherever applicable. The assessee provided correct PAN of Shri Jignesh Kannubhai Korat. The Ld. CIT(A) on his observation held that Assessing Officer made addition merely on the basis of fact that no payment has been made to the creditors during the year but he should keep in mind that project was started from 20.12.2013 and project was made in the last quarter of financial year similarly services of labour contractors were taken in the last quarter of financial year payments. All these contractors were made through account payee cheque. The Assessing Officer passed the assessment order under section 143(3) and accepted these payments as genuine though book result of assessee was not disturbed by disturbing work-in-progress. The TDS made on the payment made to labour contractors is deposited in the Govt. account in due time. The Assessing Officer has not made any inquiry from the creditors despite having complete addresses and PAN. On the basis such findings of Assessing Officer, Ld. CIT(A) deleted the entire addition of Rs.2.74 crores. 8. On the addition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rter of financial year 2015-16 and the payments were made in the next financial year. It is not the case of Assessing Officer that assessee has not incurred any expenditure or no payments against the purchase of constructional materials were made. The assessee has shown sundry creditors of Rs.3.80 crores and only the Assessing Officer disallowed Rs.2.74 crores. The Assessing Officer in the scrutiny assessment in next assessment years accepted the payments against same sundry creditors as genuine. Once the payment is accepted in subsequent year, the same cannot be doubted in the year under consideration. The Ld. AR of the assessee fully supported the order of Ld. CIT(A). 11. We have heard the rival submissions of both the parties and have gone through the orders of lower authorities carefully. We find that Assessing Officer during the assessment proceedings, noticed that assessee has shown 21 creditors though the Assessing Officer made the addition against 13 creditors only by taking view that either they have no response or the notices under section 133(6) were not complied. We find that the Assessing Officer has not segregated the parties who have not complied with or the notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certainly incurred wholly and exclusively for the purposes of assessees business. 14. We have considered the rival submission of both the parties and have gone through the orders of lower authorities carefully. We find that Assessing Officer disallowed the loan processing charges by taking view that no details for evidence to substantiate such loan processing charges were provided by assessee during assessment proceedings. We find that before Ld. CIT(A) the assessee filed detailed written submission, which we have recorded in earlier paragraphs of this order. The Ld. CIT(A) considering the fact as noted that Assessing Officer on perusal of balance-sheet of assessee found that there is no loan from bank to the assessee and disallowed such loan processing charges but before Ld. CIT(A) the assessee claimed that assessee facilitated all these people to attract buyers and borne the expenditure of loan processing charges. The Ld. CIT(A) accepted the contention that such expenses were revenue in nature and allowable under section 37(1) of the Act. Such expenditure was paid through account payee cheque and expenditure were incurred for the purpose of assessees good business. We find th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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