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TMI Blog2025 (4) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... to delete all other additions i.e. on account of unexplained sundry creditors at Rs. 2,29,71,599/-, on account of depreciation excessive claimed on mobile at Rs. 57,506/-, on account depreciation at Rs. 9432/-, on account of salary at Rs. 3,24,000/-, on account of rent claimed at Rs. 2,88,000/-, on account of software development expenses at Rs. 13,219/-. Without appreciating facts mentioned in the assessment order. 3. The CIT (A) has erred in law by deleting the addition of Rs. 94,39,000/- against the addition of Rs. 1,02,50,000/- u/s 68 of the I.T. Act, 1961 made by the AO on account of unsecured loans as the identity, creditworthiness and genuineness in respect of the concerned parties were not proved." 3. At the time of hearing, ld. DR of the Revenue brought to our notice brief facts of the case, return of income was filed on 30.09.2013 at Rs. 4,32,36,520/- which was revised on the same day declaring income of Rs. 4,33,37,240/-. The case was selected for scrutiny and assessment under section 143(3) of the Income-tax Act, 1961 (for short 'the Act') was completed vide order dated 31.03.2016 at an income of Rs. 9,66,38,594/-. 4. With regard to ground no.1, Ld DR of the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. Sometime the party deduct TDS on mobilization advance and further on booking the bills and that too on the gross amount of bills without considering the fact of deduction of amount of deduction of 10% of mobilization advance and the fact that the TDS has already been made on mobilization advance. While making running payment the employer deduct TDS on running payments without considering the fact that TDS has already been made on mobilization advance. The employer deduct TDS on booking the bills and while making payment he again deduct TDS on making payment ignoring the fact that TDS has already been made on mobilization advance and running payments. In these circumstances there remains certain discrepancy which were reconciled." 6. Considered the rival submissions and material placed on record. We observed that the AO has merely observed certain discrepancies and proceeded to reject the books and estimated the income on the gross receipts as per the form 26AS. We observed that the assessee is in the business of construction business and received contract payments. In the previous assessment year, the assessee received Rs. 83.72 crores reflecting GP of 10.46% and declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] (ii) Disallowances out of salary (pg 47-48) expenses of Rs. 324000/- [108000x3] - a) No evidence of rendering services by 3 relative persons b) no personal deposition c) No document/evidence in support of claim filed (iii) Disallowance of Rs. 9432/- [pa. 48-49) - Bills to show as to when the asset put to use not filed as the same was shown to have been purchased on the last date (iv) Disallowance on Rent Rs. 2,88,000/- (pg.49-52] - No rent agreement was filed and payment made in cash. No justification for use of premises for business purposes. (v) Disallowance of software expenses of Rs. 13219/- (pg.52,53]- These are website designing & development which are of enduring nature and rightly treated as capital expenses by the AO. (vi) Unexplained sundry creditors Rs. 2,29,71,599/- [list at pg. 10-14 of AO order - in some case at pg. 14 even address are not given) The reasons for addition has been mentioned in assessment order [page 23-24) Notices issued u/s 133(6) and sent through postal authorities at the address given by the assessee were returned back unserved Ld CIT(A) deleted all other disallowances [ (i) to (vi) above ] on the ground that where G.P. addition has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan amount. AO mentioned (p-43) that as per tax audit report unsecured loans of Rs. 1.025 crore was received during the year (as per list at page 44). Details by issuing notice(s) u/s 133(6) to concerned parties were called for by the AO(page 45), however, no details was filed. Hence, the all the three ingredients i.e. identity, creditworthiness and genuineness of lenders required to be proved u/s 68, remained unproved. Before the Ld.CIT(A) the assessee filed ITR, Balance Sheet and confirmation with PAN of these parties and on the basis of the same CIT(A) deleted the addition ignoring the fact that identity, creditworthiness and genuineness of lenders were not proved before the AO. The Ld.CIT(A) has accepted the assessee's version without any investigation or verification. Here it is pertinent to mention that the assessee did not furnish any details asked by the AO de about the lenders despite notice u/s 142(1) issued on 06/10/2015 (Pg.45) upto the date of completion of assessment on 31.03.2016 but he submit the details before CIT(A) only and the same were not provided to the AO for verification. The Ld.CIT(A) should have asked the AO to verify the details produced at the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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