9911796707
TMI Blog2024 (9) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction u/s. 54F of the Act, does not arise, and thus, in our considered view, there is no error in the reasons given by the AO and the CIT(A) to reject deduction claimed u/s. 54/54F of the Act. Thus, we are inclined to uphold the findings of the Ld.CIT(A) and reject the ground taken by the assessee. Additions towards difference in commission payment and also difference in closing balance of parties accounts - assessee claimed that entire commission payment is subject to TDS - AO was not satisfied with the explanation furnished by the assessee and according to the AO, mere deduction of TDS on payment, is not sufficient to prove the incurring of expenditure - HELD THAT:- The assessee is accounting the commission paid on sales as and when goods are dispatched, whereas, the parties accounts, commission as per Invoice and only after the goods delivered to the customers. We find that the reasons given by the assessee to explain difference between parties balance in the books of accounts of the assessee when compared to confirmations submitted by them appears to be reasonable and bona fide. Further, the assessee has deducted TDS on commission payment as per law. In fact, the AO has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd dealing mainly in iridium. The goods traded by the assessee are different from one dealt by IRIS. Therefore, from the above, it is undisputedly clear that the assessee could not establish any business connection with IRIS to prove cash advance received from the party. Therefore, there is no error in the reasons given by the AO to reject the explanation offered by the assessee with regard to source for cash deposits from IRIS, and thus, we are inclined to uphold the findings of the Ld.CIT(A) and reject the ground taken by the assessee. As regards source for cash deposits from Shri Narendra Kothari (HUF), no documentary evidence was furnished by the assessee. The reasons given by the assessee that Shri Narendra Kothari (HUF) holding sufficient funds is not supported by any documents or Income Tax Returns filed by the assessee for relevant assessment year. Although, the assessee claims that Shri Narendra Kothari (HUF) does not have any taxable income for relevant assessment years, in our considered view, since the loan between the assessee and Shri Narendra Kothari (HUF) is in cash, Income Tax Returns filed by the creditor is one of the pointer to creditworthiness of a person. Sinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re that the assessee has filed its return of income for AY 2014-15 on 29.11.2014 admitting total income of Rs. 2,31,330/-. The case was selected for scrutiny and assessment has been completed u/s. 143(3) of the Income Tax Act, 1961 (in short the Act ) on 24.10.2016 and determined total income of Rs. 58,27,360/- by making various additions, including additions towards Short Term Capital Gains derived from transfer of property, additions towards difference in commission paid on sales and debited to P L A/c, additions on account of difference in closing balance of sundry debtors, additions towards cash payment u/s. 40A(3) of the Act, and additions on account of Sales Tax penalty, Sales Tax paid on behalf of Digitran Prints and also additions under the head income from other sources towards cash deposits into bank account. The assessee carried the matter in appeal before the First Appellate Authority, but could not succeed. The Ld.CIT(A) for the reasons stated in their appellate order dated 01.02.2019, rejected the arguments of the assessee and sustained the additions made by the AO towards Short Term Capital Gains, income from other sources and disallowance u/s. 40A(3) of the Act, etc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had also rejected deduction claimed u/s. 54 of the Act on the ground that there is no provision under the Act to claim any deduction against Short Term Capital Gain, and further, the assessee has not satisfied the conditions prescribed u/s. 54 of the Act. On appeal, the Ld.CIT(A) sustained the additions made by the AO. Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before us. 4.1 The Ld.Counsel for the assessee referring to Release Deed dated 07.08.2013 and subsequent Deed of Declaration dated 06.03.2014 submitted that for the purpose of reckoning the date of transfer, the Deed of Declaration should be considered, because, the assessee has released interest in the property and also handed over possession of the property on 06.03.2014 but not on 07.08.2013. The Ld.Counsel for the assessee referring to recitals of Deed of Declaration dated 06.03.2014, submitted that since there were some difficulties, in handing over the vacant possession of the land at the time of release, and also, entire consideration was not paid, the assessee has released the interest in the land and also handed over the possession by executing Deed of Declaration dated 06.03.2014, and thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olding of asset by the assessee is less than 36 months and in fact, this fact has not been disputed by the assessee. But, the only arguments of the assessee to justify the period of holding is more than 36 months is on the basis of Deed of Declaration dated 06.03.2014 executed by Shri Amritlal Doshi, Shri Jayantilal Doshi Shri Mahendra Jain. The parties to the Deed of Declaration made a claim that there were some difficulties in handing over the vacant possession of the property and further, part of the consideration was held by the releasees. First of all, the Deed of Declaration is unilateral document, wherein, declaration made by the releasees of which, the assessee is not a party. Further, as claimed in the Deed of Declaration, what is the problem in handing over the possession of the property was not proved. In any way, transfer as per Sec.2(47) of the Act takes place, the moment conditions satisfied as per section 53A of the Transfer of Property Act, 1882. In the present case, there is no dispute with regard to fact that the conditions stipulated u/s. 2(47) of the Act r.w.s.53A of the Transfer of Property Act, 1882, are satisfied. Therefore, in our considered view, transfer o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counts. But, the AO and the Ld.CIT(A) ignored explanation furnished by the assessee and made additions. 5.2 The Ld.DR, on the other hand, supporting the order of the Ld.CIT(A) submitted that the assessee could not reconcile the difference and thus, the AO has rightly made addition and their orders should be upheld. 5.3 We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. There is no dispute with regard to fact that the assessee has paid commission to three parties and also deducted necessary TDS as per applicable provisions of the Act. The assessee had also explained reasons for difference in parties accounts when compared to confirmation filed by the parties and balance as per books of accounts of the assessee. According to the assessee, the difference is due to accounting system. The assessee is accounting the commission paid on sales as and when goods are dispatched, whereas, the parties accounts, commission as per Invoice and only after the goods delivered to the customers. We find that the reasons given by the assessee to explain difference between parties balance in the books of accounts of the assessee wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax Return and Sales Tax Return. The AO has made addition of Rs. 2,000/- of penalty paid under Sales Tax Act and a sum of Rs. 25,000/- which is debited in the P L A/c. The assessee has also claimed an amount of Rs. 13,676/- as Sales Tax paid on behalf of Digitran Prints as stock return but input not taken. Similarly, the AO has made addition of Rs. 2,222/- towards difference in Sales Tax reconciliation. 7.1 We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The reasons given by the AO to make additions towards Sales Tax / Penalty / Sales Tax paid on behalf of Digitran Prints, is the assessee could not adduce any evidences as to how penalty paid under Sales Tax Act can be allowed as deduction. Similarly, the assessee could not explain as to how Sales Tax paid on behalf of a third party can be claimed as deduction. Therefore, we are of the considered view that there is no error in the reasons given by the AO the Ld.CIT(A) to make additions of Rs. 42,898/- towards Sales Tax payment, penalty payment, and Sales Tax difference, and Sales Tax paid on behalf of Digitran Prints, and thus, we are inclined to uphold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claims that he has received cash advance from a party situated at Delhi. Further, there were no sales transactions as claimed by the assessee with IRIS. Further, the AO has given categorical findings that IRIS is rice pulling entity and dealing mainly in iridium. The goods traded by the assessee are different from one dealt by IRIS. Therefore, the claim of the assessee that he has received cash advance from IRIS is unproved. The Ld.DR, further submitted that as regards source of cash loan from Shri Narendra Kothari (HUF), no documentary evidence was furnished by the assessee to prove capacity of the person who advanced loans in cash. The AO after considering relevant facts has rightly made addition towards cash deposits into bank account u/s. 68 of the Act and their orders should be upheld. 8.3 We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The fact with regard to impugned dispute are that on 21.06.2013, the assessee has made cash deposits of Rs. 60,000/- in Standard Chartered Bank, Rajaji Salai Branch, Chennai. The assessee had also made cash deposits of Rs. 20,62,000/- on various dates starting from 09.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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