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TMI Blog2023 (9) TMI 753X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee at Rs.. 5,04,29,690/- after making various additions. 3. In the appellate order, the ld. CIT(A) has confirmed the addition on account of unsecured loan of Rs.. 23,72,057/- and deleted the addition of Rs.. 2,40,00,000/-. The assessee has received money from five creditors through banking channel. In the assessment order, the Assessing Officer has noted that in respect of 5 persons namely, B. Ramesh Babu, B. Rani (late) represented by her husband, B. Suresh Babu, B. Devi and B. Sathish Kumar, when asked to explain the nature and source of the transaction, the statement given by all the five were as follows: Borrowed revolving loan facility against pledging of shares with Citicorp Finance (India) Limited and had advanced the same to Smt. Devakumari". However, when asked for the source for the amount invested in shares and that was pledged for the loan in Citicorp Finance, the summoned persons have requested time till 09.12.2016. On perusal of the paper books submitted by them, the Assessing Officer noted that the above persons namely, B. Ramesh Babu, B. Rani (late) represented by her husband, B. Suresh Babu, B. Devi and B. Sathish Kumar have advanced a loan of Rs.. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has submitted that the provisions of section 68 of the Act had no application to the facts of the case and the ld. CIT(A) ought to have appreciated that the initial onus cast upon the assessee had been fully discharged in placing all details on record and thus, prayed for deleting the above addition confirmed by the ld. CIT(A). 5. On the other hand, the Revenue has also filed an appeal [ITA No. 3181/Chny/2019] against deletion of addition towards unsecured loans taken to the extent of Rs.. 2.40 crores and the addition deleted by the ld. CIT(A) of Rs.. 2.85 crores as well as allowing the interest of Rs.. 7,62,738/- on the above unsecured loans and submitted that the ld. CIT(A) was not correct to hold that the assessee has discharged her responsibility of proving the genuineness of loans taken to the extent of Rs.. 2.40 crores without satisfying himself about the creditworthiness of the loan creditors and genuineness of unsecured loans taken by the assessee. 6. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below including paper books filed by the assessee. In this case, the assessee had taken loan of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition of Rs.. 45 lakhs made as unexplained loan under section 68 of the Act. 6.2 Before the Tribunal, the Revenue has filed an appeal against deletion of addition towards unsecured loans taken to the extent of Rs.. 2.40 crores as well as allowing the interest of Rs.. 7,62,738/- on the above unsecured loans. Against the total deletion of addition towards unsecured loans of Rs.. 2,85,00,000/-, by accepting the deletion of addition of unsecured loans to the extent of Rs.. 45 lakhs, the Revenue has not raised any ground in its appeal before the Tribunal. Against the loan amount of Rs.. 45 lakhs, the loan creditors are income tax assessees, confirmed the transactions and moreover, the transactions were made through banking channel by RTGS and the assessee has discharged her initial onus of proving the credit and therefore, the ld. CIT(A) has deleted the loan of Rs.. 45 lakhs, which was duly accepted by the Department. On similar facts and circumstances, Against the loan amount of Rs.. 2,40,00,000/- received from B. Suresh Babu, B. Ramesh Babu, B. Sathish Kumar, B. Rani, and B. Devi also the above five creditors are income tax assessees, having PAN, the loan amount was advanced t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t ground relates to confirmation of addition on account of unsecured loan to the extent of Rs.. 23,72,057/- which includes interest thereon. In the assessment order, the Assessing Officer has noted that the assessee has claimed to have received loans from two minor viz., S. Goutham Raj of Rs.. 13,37,982/- and Minor B. Satvika of Rs.. 9,33,025/- out of the gifts received from the parental grandparents, who are none other than the assessee and her husband. Accordingly, the Assessing Officer treated the above unsecured loan as unexplained and brought to tax. On appeal, by observing that the loans are from minors out of the gifts received from the assessee and her husband, the ld. CIT(A) has held that it cannot be said to be genuine and the minors have no independent source of funds to advance the loan. Accordingly, the ld. CIT(A) confirmed the addition of Rs.. 22,71,007/- as unexplained credit under section 68 of the Act as well as disallowance of interest relating thereon of Rs.. 1,01,050/-. 7.1 Before us, the ld. Counsel for the assessee has submitted that both the minors have received gifts in the previous assessment year and the amounts were lying in the bank accounts of the mino ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t besides furnishing detailed confirmation of payment of Rs.. 8,83,600/- on accounts of factory maintenance expenses, the assessee has also brought on record the copy of ITR, PAN and Aadhar, etc. towards her claim and prayed for deleting the addition. 8.2 On the other hand, the ld. DR supported the order passed by the ld. CIT(A). 8.3 We have heard the rival contentions and also perused the paper book pages referred by the ld. Counsel. The assessee has claimed expenses for Rs.. 16,77,965/- on account of factory maintenance and debited the same in the profit and loss account, out of which the payments made to S. Srinivasalu (Engineering Works) to the extent of Rs.. 8,83,600/- were disallowed by the Assessing Officer by disbelieving the identity of the individual for which Aadhar, PAN & ITR copies were furnished besides written confirmation furnished by Shri S. Srinivasalu. It has been stated in the assessment order that the Assessing Officer has deputed the Inspector to make enquiry and it came to light that S. Srinivasalu was not traceable in the said address as was in the bills produced by the assessee, but, it was accepted that there exists in the above address, Sri Vinayaka Age ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmed by the ld. CIT(A) to the extent of Rs.. 5.00 lakhs and the balance addition of Rs.. 3,00,000/- stands sustained. 10. The next ground relates to confirmation of addition of Rs.. 3,00,730/- being depreciation and vehicle maintenance expenses. The assessee has debited a sum of Rs.. 7,29,164/- towards vehicle maintenance. These expenses have been claimed as incurred for business purpose. However, no log-book was maintained in respect of the usage of motor car and expenses cannot be said to be incurred exclusively for the purpose of business of the assessee. On perusal of the personal capital account of the assessee, the Assessing Officer has noted that the assessee does not have any other vehicle individually. Accordingly, the Assessing Officer disallowed a sum of Rs.. 72,916/- being 10% of such expenses as incurred for personal purpose. Similarly, Rs.. 2,27,817/- out of the total depreciation on vehicle amounting to Rs.. 22,78,173/- was disallowed and brought to tax. 10.1 The assessee carried the matter in appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee did not object to the disallowance of car maintenance expenses of Rs.. 72,916/-, but only disputed the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added back to drawing of the assessee and added to the returned income. 11.1 The assessee carried the matter in appeal before the ld. CIT(A). After considering the submissions of the assessee, the ld. CIT(A) has observed as under: 19.2 I agree with the AO on this ground. Given the salary she earns and the social status she maintains total drawings debited for her and her family members of Rs.. 4,63,360/- including all cess, taxes, besides savings, travelling, medical bills etc. of just Rs.2 lakhs appears clearly on her lower side and therefore addition of another 2 lakhs thereto appears reasonable and fair in the totality of the facts and circumstances of the case. This ground is partly allowed. Considering the turnover of the assessee at about Rs.. 37 crores and also drawing of Rs.. 12,00,000/- as salary from Metro Power Transmission (P) Ltd. during the previous year 2013-14, the drawings towards personal expenses shown by the assessee appears to be very low and accordingly, the Assessing Officer enhanced an additional amount of Rs.. 2.00 lakhs. The ld. CIT(A) has also observed that the addition of another 2 lakhs thereto the personal expenses appears to be reasonable and fair ..... X X X X Extracts X X X X X X X X Extracts X X X X
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