SHRI KAMLESH GANGARAM MALI,,AHMEDABAD vs. THE DY.CIT, CIRCLE-9,, AHMEDABAD

In the first ground of appeal, grievance of the assessee is that the ld.CIT(A) has erred in confirming the addition of Rs.12.89 lakhs.

Brief facts of the case are that assessee has filed his return of income on 29.3.2012 declaring total income at Rs.27,22,490/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) of the Act was issued and served upon the assessee. On perusal of the accounts, it revealed to the AO that the assessee has received Rs.12.89 lakhs from 76

I have duly considered rival contentions and gone through the record carefully. A perusal of the details compiled in tabular form would reveal that the assessee has given PAN of each creditor. He has given dates on which these amounts have been taken. He has given the details of confirmation. He has also submitted the details of repayments. All these amounts have been repaid either in the Asstt.year 2011-12 or in the year 2013. The financial year in which these payments were made have also been indicated in the details. I have gone through all these details. Section 68 of the Income Tax Act contemplates that where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof, or the explanation offered by the assessee is not, in the opinion of the AO satisfactory, then the sum so credited in

A perusal of the details submitted in the tabular form would indicate that the assessee has given basic details to the AO. The ld.AO did not issue any summons to any of the creditors. He simply directed the assessee to produce before him. The assessee has produced four-five creditors, but the AO could not conduct inquiry on account of paucity of times, because he has taken up assessment proceedings for scrutiny very late. In view of the above details, I am of the view that it is the AO who failed to conduct inquiry. Had he issued notice to these individuals and they did not respondent, then probably he may be justified to ask for fresh evidences or fresh addresses etc. But he cannot add the cash credit without making any inquiry. I allow this ground of appeal and delete the disallowance.

In the next ground of appeal, grievance of the assessee is that the ld.CIT(A) has erred in confirming the disallowance of electricity expenses at Rs.91,500/-.

Brief facts of the case are that the assessee has deposited a sum of Rs.30,50 lakhs in January, 2011 with M/s.Ratna Deep Infra Pvt. Ltd. without any interest. The ld.AO harboured a belief that interest bearing funds were advanced to interest free loans. Therefore, he disallowed the interest expenditure of Rs.91,500/- by charging interest on these deposits of Rs.30.50 lakhs at the rate of 12%. Appeal to the CIT(A) did not bring any relief to the assessee.

In the result, the appeal of the assessee is allowed.