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TMI Blog2024 (5) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... we find no reason to interfere with the order of the ld. CIT(A). The appeal of the revenue on this ground is dismissed. Ad-hoc Disallowance of expenses - assessee furnished the detail of some of the expenses, but did not produce bills/vouchers in support of his contention - HELD THAT:- AO has made ad-hoc disallowance inspite of the fact that all the evidences such as material purchase, payment of VAT, insurance expenses, sub-contractor expenses and power fuel expenses alongwith the ledgers are submitted before the authorities below. CIT(A) has gone through the entire details and rightly deleted the addition. Hence, we decline to interfere with the order of the ld. CIT(A). The appeal of the Revenue on this ground is dismissed. Deduction u/s 80IA - claim denied as assessee was not an Indian company and was given civil contract work of balance work/part of the work and comes under the category of Works Contract - HELD THAT:- Keeping in view the settled judgment of ABG Heavy Industries Ltd. [ 2010 (2) TMI 108 - BOMBAY HIGH COURT ], BMW Industries Ltd.[ 2017 (1) TMI 1200 - ITAT KOLKATA ] the deduction claimed by the assessee u/s 80IA has been rightly allowed by the ld. CIT(A). - Sh. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ured loans of Rs. 77,00,000/-: 3. The Assessing Officer noticed that the assessee has received unsecured loan of Rs. 77,00,000/- from M/s Pradik Impex Pvt. Ltd., during the year under consideration. The Assessing Officer issued notice u/s 133(6) of the Income Tax Act, 1961 to the creditor to verify the genuineness of loan, but no reply was received directly from the creditor in response to notice. The Assessing Officer held that, however, a reply from creditor was delivered by someone on the Receipt Counter on 24.12.2019 which is reproduced as under: With reference to your notice with number DCIT/Circle/HSR/19- 20/Compulsory/51/4781 dated 16.09.2019, we are submitting herewith the required documents relating to unsecured loan of Rs. 77,70,000/- given to M/s Gawar Ceigil (J.V.) DSS-278, Sector 1617, Hisar during the F.Y. 2016-17. Also, no interest is charged on loan given as the directors are relative. 4. The AO observed that this reply was signed by some so called authorized signatory where name, address and PAN were not mentioned. 5. To examine the genuineness of the reply and its contents summons were issued on 25.12.2019 for personal appearance on 26.12.2019 to Shri Gobind Prasa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umati Dayal vs. CIT. 9. Aggrieved, the assessee filed appeal before the ld. CIT(A). 10. Before the ld. CIT(A), the assessee has taken the following arguments and submitted the relevant details pertaining to those arguments: That the AO issued a Notice calling for information u/s 133(6) of the Act from creditor of the Appellant, i.e. Pradik Impex Pvt. Ltd. in connection with the unsecured loan advanced to the Appellant during the FY 2016-17. In response, M/s Pradik Impex, through their Authorized Signatory Sh. Umesh, Director filed response with complete documents relating to unsecured loan of Rs. 77,70,000/- given to the Appellant during FY 2016-17. In the reply, it was also stated that no interest is charged on the loan given as the directors are relatives. The reply submitted along with supporting documents on 24.12.2019. That the following documents were submitted by Pradik Impex: a. Cover letter in reply to Section 133(6) of I. T. Act in case of Appellant for AY 2017-18, containing inter-alia PAN, Address of Pradik Impex. b. Copy of ledger account of Pradik Impex appearing in books of Appellant showing the unsecured loan advanced in FY 2016-17. c. Bank Account Statement of Prad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipt of Rs. 50,00,000 from Tiku Ram Gum and Chemicals on 30.03.2016 b. Receipt of Rs. 10,00,000 from Mahan agar Promoters Pvt. Ltd. on 02.04.2016 c. Receipt of Rs. 9,70,797 from Tiku Ram Gum and Chemicals on 04.04.2016 d. Receipt of Rs. 8,00,000 from Venus Impex on 16.04.2016 12. In reply to Notice under Section 133(6) issued to it in Appellant s case, has duly submitted various documents in the Assessment proceedings such as, a. Ledger accounts of Tiku Ram Gum and Chemical, b. ITR Acknowledgment of Tiku Ram Gum and Chemical, c. Confirmation of accounts of Mahan agar Promoters and d. Confirmation of accounts of Venus Impex as referred to above and argued that the same has not been taken into consideration. 13. The Assessee submitted the following details before the ld. CIT(A): Mahanagar Promoters: ITR-Acknowledgment of Mahanagar Promoters Pvt. Ltd. for AY 2017-18. Pradik Impex: ITR- Acknowledgment of Pradik Impex for AY 2019-20, 2018-19, 2016-17, 2015-16, 2014-15, 2013-14, 2012-13. 14. It was also submitted before the Ld. CIT(A) that the AO has erroneously noted that in the letter filed by Authorized Signatory of M/s Pradik Impex, no PAN and address was stated. That the said observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the parties, the source of funds invested and the genuineness of the transactions. The field reports revealed that the shareholders were either non-existent or lacked creditworthiness. in case of NRA Iron and Steel, the AO made an independent and detailed enquiry including survey of so-called investor company from Mumbai, Kolkata and Gauhati to verify the creditworthiness of the parties, source of funds and genuineness of the transactions. The field reports reveal that shareholders were either non-existent or lack of creditworthiness. On the contrary, in the instant case, the identity of the creditor Pradik Impex, was duly disclosed. 17. On going through the details, the ld. CIT(A) deleted the addition holding as under: During the course of assessment proceeding, the A.O. noticed in the balance sheet of the appellant that it had taken an unsecured loan of Rs. 77,00,000/- from M/s Pradik Impex Pvt. Ltd. (hereinafter as Pradik Impex ). To ascertain the genuineness of the entry A.O. issued notice u/s 133(6) to Pradik Impex. A reply was received by the A.O. on 24.12.2019 wherein the loan to the appellant was confirmed and also it was stated that no interest was charged as directors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to be established. First identity of the loan creditor, creditworthiness of the loan creditor and genuineness of the transaction. The appellant before the A.O. supplied PAN, address of the creditor. Pradik Impex in the submissions made also supplied details like ledger, confirmation of those entities, ITR from which it received funds, which were forwarded as unsecured loan to the appellant. Also bank account statements showing the loan transactions were also provided. Therefore, all the three conditions were successfully met by the appellant. The A.O. relied upon the decision of Hon ble Supreme Court in the case of PCIT vs. NRA Iron and Steel MANU/SC/0325/2019 to establish the loan as non-genuine. The Hon ble Apex Court had rendered the decision which was based on independent and detailed enquiry including survey of so-called investor company from Mumbai, Kolkata and Gauhati to verify the creditworthiness of the parties, source of funds and genuineness of the transactions. However, the conclusion drawn by the A.O. was based on flawed enquiry at an address which was not the place of business of the concerned party. Conducting a business on rent cannot be a reason to hold a tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Any sum is found credited in the books of an assessee maintained for any previous year. (b) And assessee offers no explanation about the nature and source thereof. (c) Or the Explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory. 23. In the instant case, it is not the case of the AO that no explanation was offered as regards the nature and source of the sum credited in books of the Appellant. On the other hand, it is the case of AO that the genuineness of loan and credit worthiness of creditors has not been proved. 24. The assessee has submitted the entire details about the unsecured loans received from Pradik Impex Pvt. Ltd. and all the relevant details to prove the identity, genuineness and creditworthiness of the parties. The AO has made addition entirely on surmises and on wrong facts. The summons have been issued at wrong address and the details given by the assessee have been totally ignored. Having gone through the facts narrated above and the rationale given by the ld. CIT(A), we find no reason to interfere with the order of the ld. CIT(A). The appeal of the revenue on this ground is dismissed. Ad-hoc Disallowance of Rs. 10,00,000/- 25. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reports issued by United India Insurance Co. Ltd. q. Receipt issued by United India Insurance Co. Ltd. r. Endorsement schedule and endorsement worksheet, contractors all risk insurance policy. Copy of Ledger account of insurance expenses along with policy and receipt issued by United India etc.. Payment of Bihar VAT for year 01.04.2016 to 31.03.2017 s. Details of B. VAT deduction and payment for the year 201617, duly signed by Deputy General Manager (Tech.), BSRDC, Project Implementation Unit, Hajipur and Accounts executive, BSRDC, Hajipur. t. Challans Copy of Certificate issued by Bihar VAT Authorities along with copy of challans. Materials purchase u. Ledger of purchase of Bitumen, Steel, Cement, Misc. Consumable stores, Transformer, Bricks, Black stone, GSB Material, Rubber process oil, Black dust, Stone dust, wash sand, Local Mitty, Bolder dust etc. Copy of Ledger of accounts of Materials purchased from several vendors . 118. In this respect, it is submitted that when the payment of all expenses were being made through bank transfers, and when all the transactions were duly being recorded in books of accounts of the Appellant, the findings of AO is not acceptable. 29. On going ..... X X X X Extracts X X X X X X X X Extracts X X X X
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