9911796707
TMI Blog2018 (4) TMI 1949X X X X Extracts X X X X X X X X Extracts X X X X ..... eal estate. The assessee is a partnership firm and had filed its return of income for assessment year 2012-13 on 28.09.2012 declaring total income of Rs. 13,24,078/-. In the course of assessment proceedings, the ld. AO issued letters u/s 133(6) to the following sundry creditors: i)Tricon Enterprise ii) Shib Shakti Builders iii) Singh & Singh Associates All these parties replied to the letters issued by the Assessing Officer and stated the balance outstanding as per their books and the same was compared by the ld. AO with the balance shown in the assessee's books and the following discrepancies were noticed:- Sl. No. Party Name Balance as per party Balance as per assessee Difference 1. Tricon Enterprice 16,75,468/- 19,20,779.80 245311.8 2. Shib Shakti Builders Nil 2661706.25 2661706.25 3. Singh & Singh Associates Nil 801609/- +38032/- 839641/- The ld. AO observed that the assessee could not furnish any reconciliation of the aforesaid figures before him. The assessee sought for cross-examination of the aforesaid three parties on 09.03.2015 and the date was re-scheduled to 12.03.2015, which opportunity was not availed by the assessee. Accordingly the ld. AO pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit i.e. payable by the assessee and out of that sum, Rs. 4 lacs. was paid by the assessee during the assessment year 2011-12 and the balance outstanding as on 31.03.2011 was Rs. 801609/- credit. There were no transactions during the assessment year 2012-13 with the said party. Accordingly, the balance outstanding as on 31.03.2012 was Rs. 8,01,609/- credit in respect of 303A, S.N. Roy Road Project. Hence, the total amount payable to Singh & Singh Associates as on 31.03.2012 was Rs. 7,63,577/- credit i.e. (8,01,609 -38,032). 3.2. The Ld. CIT(A) also observed that the assessee was having transactions with these parties in the preceding years as could be evident from the ledger account for the last 12 years. The Ld. CIT(A) duly appreciated the fact that pursuant to the dispute with the parties consequent to the demolition of 303A, S.N. Roy Road Project by the Kolkata Municipal Corporation, the assessee had chosen not to make payments to the aforesaid parties and had kept it as pending in its books and waiting for settlement of disputes. These facts were duly brought to the notice of the ld. AO vide letter dated 18.03.2015 by the assessee which was also reproduced by the Ld. CIT(A) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) also observed that in respect of Tricon Enterprise, the assessee had made payment of Rs. 469354/- on 18.10.2012 i.e. in assessment year 2013-14 and the balance outstanding in respect of these three parties as on 31.03.2013 were also reflected by the Ld. CIT(A). 3.3. The Ld. CIT(A) also observed that Manoj Singh has not appeared before the ld. AO pursuant to the summons issued to him is quite natural in view of the existing dispute between the assessee and Mr. Manoj Singh. Moreover, the said requirement of seeking the presence of Mr. Manoj Singh was made by the ld. AO towards the end of the limitation period as could be evident from the assessment records. The Ld. CIT(A) further observed that there was really no need for the party to attend as all the evidences that are required are very much available on record. This is not the case of doubtful expenditure so as to doubt the very basis of the expenditure and consequential creation of liability by the assessee. The Ld. CIT(A) further stated that information sought for in the letter u/s 133(6) of the Act was ambiguous inasmuch as it only sought for the transactions during the year which was duly replied by the certain suppliers th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn monies from the firm without any interest and it is also a fact that the other partner Rajkumar Damani(HUF) had substantially credit balance in the firm. The details of balances held by the partners in their capital and current account are as under: The ld. AO from the aforesaid table observed that one partner i.e. Saztra Commercial Pvt. Ltd. had withdrawn Rs. 95,10,000/- from the fund on which no interest is to be paid to the firm whereas the interest is paid on the unsecured loan borrowed by the assessee firm in the total sum of Rs. 45,46,405/-. Accordingly, he observed that the borrowed funds of the assessee have been diverted for non-business purposes and proceeded to disallow proportionate interest thereon in the following manner: 95,10,000 / 8,69,67,367 * 45,46,405 = 4,97,156/- Accordingly, the ld. AO disallowed the interest of Rs. 4,97,156/- in the assessment. 5.2. The Ld. CIT(A) on going through the details of partner's capital and current account observed that one partner is having sufficient credit balance which has been allowed to be overdrawn by the other partner. Hence, the excess withdrawals made by Saztra Commercial Pvt. Ltd. is not from the borrowed funds of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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