ACIT, CIRCLE-42, MURSHIDABAD, MURSHIDABAD vs. M/S KISHAN F.L. BOND HOUSE, MURSHIDABAD

PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER

Therefore, it is clear that the confirmations for the said parties having advancing said loans to the assessee were there before the AO, but, could not be verified. We find that CIT(A) examined the said confirmations and found satisfied the identity of the said two parties and the amounts in question were old amounts and they were assessed to tax having valid PAN. It is pertinent to note that CIT(A) has co- terminus power with that of AO and having exercising such power examined the record and confirmations which were part of assessment record, found satisfied regarding the identity, creditworthiness and genuineness of the transactions.

Thus, we find no infirmity in the order of CIT(A) in deleting the addition made by the AO on account of treating us. Ground No.1 raised by the Revenue fails and it is dismissed.

4.2. “I have considered the submissions of the appellant and perused the assessment order. In ground numbers 2, 3 & 4 the AO has disallowed amounts of Rs.9,04,143, Rs.7,71,2911­ and Rs. 12,26,924/­ on account of breakage, rebate and sales scheme respectively. It can be seen that the AO has passed a rather hurried order where no investigations worthwhile were carried out resulting in a non speaking order. The AO disallowed an amount of Rs. 9,04,114/­ which was claimed as brokerage stating that the same could not be verified by the assessee during the assessment proceeding. The assessee is a dealer in foreign liquor and is a licensee bond holder. Brokerage is a common occurance in their trade and they have properly accounted for it in their books of accounts which were audited and filed during the assessment proceedings. A glance at their Ledger A/c copy of the breakage account shows all relevant details party­ wise/date­wise and the amounts involved. The AO has not said as to why these evidences were not enough proof of this expense. Hence the addition is deleted. The AO has disallowed a rebate claimed of Rs 7,71,291/­ simply by observing that Rebate seems to be no different from cash discount and therefore, the assessee's contention of claiming, rebate is rejected and the amount of Rs.7,71,291/­ is added to the income of the assessee. The appellant has submitted that all relevant ledger account which were audited were filed before the AO which clearly establishes the genuinity of these expenses . I have perused all the relevant documents filed by the appellant and I find force in their contention. The AO has not made any other investigation as to why such an expense should be disallowed. Hence the addition is deleted. The AO has also disallowed a sales scheme claim of Rs. 12,26,924/­ simply stating that sales scheme of Rs.12,26,924/­ could not be differentiated in any manner whatsoever from cash discounts and since the assessee failed to verify, it is added to the total income of the assessee. The appellant has submitted that all details were submitted during the assessment proceedings. I have perused all the relevant Page | 3 documents filed by the appellant and I find force in their contention. The AO has not made any other investigation as to why such an expense should be disallowed. The same details and evidences were tiled before the AO but the AO chose to ignore the submissions such as audited accounts in an arbitrary manner. It is clear that the AO has not substantiated his action with any credible findings. He has simply concluded that these expenses are not allowable whereas it has been duly detailed with reference to the names of the parties & very much related to the business of the appellant. For reasons cited above, the addition is deleted.”

Order pronounced in the open court on 18.07.2018.