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TMI Blog2023 (4) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... LLP. From the details filed before the A.O., it was clear that the source / capacity/genuineness stand explained. It is also fact on record that Shri Arvind Billa duly appeared before the A.O. in remand proceedings. As such, all requirements at the end of appellant stand fulfilled. The A.O. has also confirmed this fact in his report - Addition as deleted by the ld. CIT(A) stands confirmed in the absence of any material contra brought before us. The appeal of the revenue on this ground is dismissed. Disallowance of Salary Expenses - no details were filed, the AO disallowed 75% of the salary expense - CIT(A) deleted the addition based on the report of the AO wherein the AO submitted that the requisite details were duly provided - HELD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n deleting the addition of Rs.1,39,84,900/- holding that there is no legal basis for such an ad-hoc disallowance. 3. The AO made addition of Rs. 6.04 crores owing to non-submission of details of investors. Before the ld. CIT(A), the assessee filed details and the source of capital contribution from M/s. Affy Parenterals. 4. The relevant part of the submission of the assessee before the ld. CIT(A) is as under: We are humbly submitted that we have duly and truly submitted with Ld. AO during the assessment proceeding u/s 143(3) as under: The main ingredients of the section 68 of the Income Tax Act, 1961 are below: i) Identity of the investors/customers/creditors/Partner ii) Genuineness of the Transaction iii) C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Bank statement of Assessee firm M/s Affy Foodtech LLP in which narration also revealed that amount received from Mr. Arvind Billa (Partner). iii) Creditworthiness of the Partner This is to bring your kind attention that Arvind Billa (Partner) is also the partner in M/s Affy Parenterals. M/s Affy Parenterals, also filed their income tax return and assessed within the same ward. The fund which was introduced as capital by Mr. Arvind Billa (Partner) in the assessee firm M/s Affy Foodtech LLP, had originally received from his another partnership firm M/s Affy Parenterals, from where sufficient credit balance in his capital account. Narration in HDFC bank statement of Mr. Arvind Billa (Partner) also revealed that funds actually ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant to the AY 2016-17. e) M/s Affy Parenterals is also filed their income tax return within time regularly with the respective jurisdictional authority. Copy of the ITR is also enclosed for your kind perusal and records. In this regards we humbly submitted that Mr. Arvind Billa is also Partner having 80% of profit sharing ratio in M/s Affy Parenterals. There is sufficient credit balance in his capital account with M/s Affy Parenterals. Amount has been received from M/s Affy Parenterals and transferred to his another partnership firm as capital in assessee firm M/s Affy Foodtech LLP. M/s Affy Parenterals have also regularly filed their income tax return since long about last 10 years and having good turnover in very good profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the details filed, the ld. CIT(A) held as under: Genuineness and source of funds deployed as addition in capital in assessee firm by Mr. Arvind Billa as a partner in M/s Affy Foodtech LLP is supported, duly and truly proved by Bank statements, and copy of the Ledger account of M/s Affy Parenterals and M/s Affy Foodtech LLP which are duly submitted herewith. Moreover, each and every transaction have duly and truly been self revealed as narration mentioned in the personal HDFC bank statement that funds transferred by debited capital account of Mr. Arvind Billa from M/s Affy Parenterals and the same was transferred as capital in M/s Affy Foodtech LLP. That has also been duly and truly been verified by your goodself in HDFC bank sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details of salaries and why the provision of ESIC and PF was not applicable. In reply to the same, assessee had submitted that the provision of ESIC and PF are not applicable to them. The month wise and Person wise details of Salaries were not submitted. Considering the non-reply of the assessee that the provisions of ESIC are not applicable derived into a fact that the employee strength of the assessee firm is below 10 employees as per the AO. Since, the assessee firm had claimed Salary Expenses of Rs.1,86,46,534/- for which no details were filed, the AO disallowed 75% of the salary expenses claimed by the assessee. 9. It is noted from the A.O.'s report dated 13.11.2019 and from the assessee's submissions that the requisite det ..... X X X X Extracts X X X X X X X X Extracts X X X X
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