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Income Tax Appellate Tribunal, DELHI BENCH “SMC-I”, NEW DELHI
Before: SHRI H.S. SIDHU
This appeal by the Assessee is directed against the Order of the Ld. Commissioner of Income Tax (Appeals), Ghaziabad dated 30.6.2014 pertaining to assessment year 2009-10.
2. The grounds of appeal read as under:-
“1. Appellant is engaged in manufacturing and trading of electronic wire in the name of M/s Shiv Enterprises a proprietorship concern.
The assessment of appellant was completed u/s. 143(3) by ITO, Ward 1(2), Ghaziabad for the AY 2009-10.
3. The CIT(A) was wrong in upholding the disallowance of Rs. 5,00,000/- from Mr. Rajendra Singh. The loan was taken by account payee cheque from him and bank statement and confirmation of Mr. Rajendra Singh were produced before AO. So this addition deserves to be deleted.
4. The CIT(A) was wrong in upholding the disallowance of 25% of expenses of power and fuel, salary and wages, telephone expenses and car running expenses as these expenses were incurred for business purpose only and all the vouchers were produced before AO.
Under the facts and circumstances of the case and some other points which may be urged at the time of hearing, your honour is requested to delete the additions made.”
The facts narrated by the revenue authorities are not disputed by both the parties, hence, the same are not repeated here for the sake of brevity.
During the course of hearing, Ld. Counsel of the assessee has stated that in this case return was filed on 18.9.2009 disclosing income of Rs. 1,47,400/- which was processed and subsequently selected for scrutiny. Statutory notices were issued and in response to the same the assessee’s AR attended the proceedings from time to time and filed the replies. In this case the assesee enjoyed income from manufacturing of electronics wire. In the balance sheet the assessee had disclosed unsecured loans from others of Rs. 5,51,460/- and vide notice u/s. 142(1) of the I.T. Act, 1961 dated 9.8.2011, the assessee was required to give name and complete postal address of all the persons from whom unsecured loans were taken, including squared up loans, confirmation of their ledger account with the PAN and Ward/Circle where the lenders are assessed to tax. In response to the same, assessee stated that loan of Rs.5 lacs has been taken from Mr. Rajendra Singh Prop. M/s Shri Kirshna Wire Industries and assessee and the assessee filed PAN, confirmation and copy of bank statement of the lender, but the AO found some defects in the information and directed the assessee to produce the lender, but he was unable to produce the lender. Therefore, AO made the addition in dispute in the hands of the assessee which was subsequently confirmed by the Ld. CIT(A). In view of the above, Ld. Counsel of the assessee has stated before the Tribunal that the AO has wrongly made the addition, because the amount was taken as loan from Sh.
Rajendra Singh through account payee cheque and bank statement and confirmation were produced before the AO, despite that AO has not considered the same and made the addition. However, he also submitted that the AO has not issued any summon u/s. 131 of the I.T. Act, 1961 to the creditor, which is very much essential. Hence, he requested that issues in dispute may be set aside to the file of the AO for fresh consideration, under the law, after considering all the documents and assessee may be granted adequate opportunity of being heard.
On the other hand, Ld. DR relied upon the orders of the lower authorities and opposed the request of the Ld. Counsel of the assessee.
I have heard both the parties and perused the relevant records available with me especially the impugned order. I find that assessee had disclosed unsecured loans from others of Rs. 5,51,460/- and vide notice u/s. 142(1) of the I.T. Act, 1961 dated 09.8.2011, the assessee was required to give name and complete postal address of all the persons from whom unsecured loans were taken, including squared up loans, confirmation of their ledger account with the PAN and Ward/Circle where the lenders are assessed to tax. In response to the same, assessee stated that loan of Rs.5 lacs has been taken from Mr. Rajendra Singh Prop. M/s Shri Kirshna Wire Industries and assessee filed PAN, confirmation and copy of bank statement of the lender, but the AO found some defects in the information and directed the assessee to produce the lender, but he was unable to produce the lender. Therefore, AO made the addition in dispute in the hands of the assessee which was subsequently confirmed by the Ld. CIT(A). I further find that AO has wrongly made the addition, because the amount was taken as loan from Sh. Rajendra Singh through account payee cheque and bank statement and confirmation were produced before the AO, despite that AO has not considered the same. I further find that AO has not issued any summon u/s. 131 of the I.T. Act, 1961 to the creditor. In view of the above, I set aside the issues in dispute to the file of the AO for fresh consideration, under the law, after considering all the documents and assessee may be granted adequate opportunity of being heard.
In the result, the appeal filed by the assessee stands allowed for statistical purposes.