Amba Industries, Patan V. The Income Tax Officer, Ward-2, Patan

ITA 1989/AHD/2016

AI Insights

Amba Industries appealed against the orders of the Commissioner of Income Tax (Appeals), Gandhinagar, which confirmed various additions and disallowances made by the Assessing Officer for the assessment years 2010-11 and 2011-12. The main issues revolved around unexplained cash credits, disallowances under sections 40(a)(ia) and 24, and additions on account of interest expenses. The Tribunal noted that the assessee did not provide adequate evidence to prove the creditworthiness of the loan providers or the nature of the income, and failed to contest the disallowances effectively during the hearings. The Tribunal also addressed procedural issues such as the alleged lack of opportunity for the assessee to be heard, which were found to be unsubstantiated.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131395 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-06-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 28-07-2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Principle of natural justice; Non-deduction of tax; Reasonable cause; Corroborative evidences; TDS
• Section: 131; 68; 40A(3); 40(a)(ia); 80G; 250; 194J; 194A

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: Ms. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member Amba Indu stries, Natio nal Highway No. 14, At & Po st: Sinad, Tal-Radhan pur, Dist-Patan PAN: AAPF A0 267Q (Appellant) Vs Inco me Tax Officer, Wd-2, Patan (Resp ondent) Asses see b y : None Revenue by : Shri Bhola ram Dev ashi, Sr. D. R. Date of hearing : 12-06 -2 023 Date of pronouncement : 05-07 -2 023 आदेश/ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- These two appeals filed by the assessee are against the order of the ld. Commissioner of Income Tax (Appeal), Gandhinagar, Ahmedabad in proceeding u/s. 250 vide orders dated 02/03/2015 & 22-09-2015 passed for the assessment years 2010-11 & 2011-12. 2. The assessee has raised the following grounds of appeal:- ITA Nos. 1988 & 1989/Ahd/2016 Assessment Years 2010-11 & 2011-12 I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 2 Assessment year 2010-11 “1. The learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs.37,50,000/- made by the Assessing Officer u/s.68 of the Income Tax Act, 1961 as alleged unexplained cash credits. 2. The learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance of Rs.2,21,745/- made by the Assessing Officer u/s.40(a)(ia) of the I.T. Act, 1961 3. The learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs.1,80,000/- made by the Assessing Officer u/s.24 of the I.T. Act,1961. 4. The learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance to the extent of Rs. 1250/-out of donation expenses. 5. The learned Commissioner of Income Tax (Appeals) has erred in confirming the addition on account of interest expenses of Rs.1,87,418/- made by the Assessing Officer on the basis of AIR. 6. The Appellant prays that the delay in filing of appeal may kindly be condoned. 7. The appellant craves leave to add, alter, amend or modify any of the grounds of appeal on or before the date of hearing of appeal.” Assessment year 2011-12 “1. The learned Commissioner of Income Tax (Appeals) has erred in passing an Ex-Parte order without giving reasonable opportunity of being heard to the Appellant hence the same being against the principles of natural justice and law requires to be cancelled. I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 3 2. The learned Commissioner of Income Tax (Appeals) has erred in passing ex-parte order without rejecting the adjournment applications filed by the Appellant. 3. The learned Commissioner of Income Tax (Appeals) has erred in passing ex-parte order without considering the fact that there was a reasonable cause for the alleged non attendance. 4. Without prejudice to the above, the learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance of Rs.10,28,471/- made by the Assessing Officer u/s.40(a)(ia) of the Income Tax Act, 1961. 5. The learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance of job work charges/expenses of Rs.5,23,165/- made by the Assessing Officer. 6. The learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance of Rs.6,35,960/- made by the Assessing Officer u/s.40A(3) of the I.T. Act, 1961. 7. The learned Commissioner of Income Tax (Appeals) has erred in confirming 'the disallowance made by the Assessing Officer for the donation expenses of Rs.9750/-. 8. The learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance made by the Assessing Officer on account of telephone expenses of Rs.1735/-. 9. The learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance made by the Assessing Officer on account of travelling expenses of Rs.6090/-. 10. The learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance made by the Assessing Officer on account of Vehicle expenses of Rs.4760/-. 11. The learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance made by the Assessing Officer on account of Vehicle, Petrol & diesel expenses of Rs.34,475/-. I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 4 12. The learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance made by the Assessing Officer on account of depreciation expenses of Rs.13,765/-. 13. The Appellant prays that the delay in filing of appeal may kindly be condoned. 14. The appellant craves leave to add, alter, amend or modify any of the grounds of appeal on or before the date of hearing of appeal.” Condonation of Delay: 3. We observe that the appeals for assessment year 2010-11 and 2011-12 are time-barred by 427 days and 243 days respectively. The assessee has filed application for condonation of delay and submitted that both the working partners of the assessee firm Mr. Devchandbhai Thakkar and Mr. Kalpeshbhai Thakkar were suffering from cancer and were temporarily undisposed during the impugned period when appeal was to be filed before ITAT. The relevant extracts of the application for condonation of delay are beautiful reference: “2. It is hereby submitted that both the working partners of the firm namely Devchandbhai Laljibhai Thakkar and Kalpeshbhai D. Thakkar were suffering from cancer and were temporarily indisposed and even not attending business. The event of ill health occurred during the course of appellate proceedings in the case of Shri Devchandbhai L. Thakkar. The cancer came to be detected in the month of February 2015. The copy of colonoscopy report dated 21.02.2015 issued by Mehta Hospital has also been furnished. He was detected with cancer of intestine and due to medical facilities in Radhanpur not being of adequate standards he was shifted to Apollo Hospital, Ahmedabad. He underway a cancer surgery on 01.03.2015 and he was ultimately given a discharge on 14.03.2015. However, there was continous medical follow up and other subsequent action which had to be undertaken post surgery. In the mean time Shri Kalpesh D. Thakkar, son and other working partner was also detected with cancer which I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 5 came to be confirmed in the report dated 14.04.2015, the copy of which has been separately furnished. Shri Kalpesh Thakkar is a young person of 38 years and he was confirmed with diagnoses of rectum cancer. He was underwent chemo and radiation therapy and underwent surgery in S L Raheja Hospital, Mumbai. He was ultimately discharged on 15.07.2015. In the mean time Smt. Premilaben Devchandbhai Thakkar, mother and wife of Kalpesh D. Thakkar had to be admitted in CIMS Hospital, Ahmedabad on account of cellulites which is bacterial infection of skin. 3. On account of the above factors the filing of further appeal could not be taken place within the stipulated time frame. However, on resumption of work a separate counsel for preparing the appeal before the Tribunal was engaged. In fact, the filing fees also were deposited by me on 22.06.2016 itself. However, due to the medical illness as narrated above the other formalities with regards the filing of appeal could not be vigorously pursued. On account of above facts and circumstances there was a delay in the filing of appeal, for which a separate affidavit in support has also been filed along with the appeal memo.” 3.1 In view of the circumstances highlighted above, in the interest of justice, the delay in filing of the present appeals are hereby being condoned. On Merits: We shall first take up assessee’s appeal for assessment year 2010-11 Ground number 1: Ld. CIT(Appeals) erred in confirming addition of 3,750,000/- under section 68 of the Act 4. The brief facts in relation to this ground of appeal are that during the course of assessment, the assessing officer made addition is amounting to 37.5 lakhs under section 68 of the Act on the ground that the assessee had taken loan from 4 persons, which remained unexplained and cannot be treated as genuine. In appeal, Ld. CIT(Appeals) dismissed the appeal of the assessee on the ground that the assessee could not prove the creditworthiness I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 6 /capacity of the persons claimed to have advanced loan to the assessee. The Ld. CIT(Appeals) observed that even the persons are not assessed to tax, no books of accounts have been maintained, no bank statement or source of income which could prove that these parties had sufficient funds for the huge advances made to the assessee are available. Accordingly, in light of the circumstances, the Ld. CIT(Appeals) held that the assessing officer had correctly made addition of some of 37.50 lakhs as unexplained income of the assessee. While making the addition, Ld. CIT(Appeals) observed as under: “On careful consideration of the entire facts, 1 find that the appellant in the case Heenaben Rameshkumar from whom Rs. 10 lac was obtained had submitted that her source of income was stitching and embroidery work. However no supporting evidence for income earned have given. Copy of P &. L account furnished is not supported by any evidence and income as per P & L account is Rs. l , 53 , 465 (3,945/- Interest income + 79,180/- embroidery income +70,340 income). It is also that she could not even though furnish copy of her bank statement and balance sheet so the above loan transaction for verification. The observation made by the AO that Heenaben seems to be doing the work to supplement the family income and not the capacity to make advance of Rs. 10 lac. The evidences furnished by the appellant does not prove the creditworthiness of Smt Heenaben to advance loan of Rs.10 lac. Therefore, the claim of the appellant is hereby rejected. With to Smt. Daxaben Bharatkumar Thakkar, who had advanced Rs.6 lac, it is noticed that she is not filing her return of income, It is that Smt Daxaben is also having her source of income from stitching and embroidery work, However, no supporting evidence for income earned had been given. It is also noticed that Copy of P & L account furnished is not supported by any evidence. Looking to the nature & quantum of income it seems that she is doing the work to supplement the family income and does not have the capacity to make advance of Rs. 6 lac. Therefore circumstantial evidence as noted by the AO does not prove creditworthiness of Smt Daxaben to advance loan of Rs. 6 lac. Therefore, this claim of the appellant is also hereby rejected. Further, with regard to advance taken from Smt. Kalavatiben Thakor of Rs. 4 lac, I find that AO had issued summons u/s 131 of the Act She did not present herself before the AO, but her husband and furnished like copy of return I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 7 of income, sheet, P&L account, account bank account etc, the return of income furnished, it is by the AO that for AY 2010-11 and 2011-12, total income of Rs.94,580/- and Rs.1,00,590/- respectively is shown from stitching work. From the bank statement for the relevant year as well as in preceding year the balance was not exceeding Rs.6,500/- which means that she had no capacity to advance to the appellant. Further, it is also noticed only on the date on which for loan was issued, cash of Rs. 4,00,000/- was Further, it is also noted from the bank statement that loan is shown to be returned back on 07/10/2010 which was withdrawn in cash on the These facts prove Srnt Kaiavatiben Bhailalbhai Thakkar does not have worthiness for advancing the loans. In such- facts of the case, the argument of the appellant is not satisfactory and is hereby rejected. Further, with regard to advance of RS.17,50,000/- from. Shri Rameshkumar D. Thakkar, it is seen that though he is a PAN holder, but he is not filing return of income. Source of his income is to be from agriculture and interest income. However, in support of this claim, no supporting evidences of income earned is furnished. Appellant could not even furnish copy of bank statement of Shri Rameshkumar D. Patel. He is not maintaining any books of accounts and therefore, the transaction could not be verified and it Is therefore, held that the AO has rightly held that creditworthiness of Shri Rarneshbhai D. Thakker is not proved by any evidences and the AO has rightly, disallowed the loan of Rs. 17,50,000/-. This claim of the appellant is also rejected. To sum up, it is held that appellant could not prove the creditworthiness and capacity of the persons who are claimed to have advanced loan to the appellant. Even these persons are not assessed to tax, though some of them are PAN owners. No books of account, statements or source of income could prove that these parties had sufficient funds for huge advances made to the appellant. No proper books of accounts are maintained by these persons. In such circumstances, the claim made by the appellant cannot be allowed without furnishing proper evidences which are verifiable. Therefore, the disallowance made by the AO of Rs. 37,50,000/- is held justified and is confirmed. The relevant ground of appeal is rejected.” 5. On going to the facts of the instant case, we observe that the assessee has not been able to furnish any plausible explanation to establish the creditworthiness and the genuineness of the parties. Accordingly, in our considered view, looking into the facts of the instant case, Ld. CIT(Appeals) has not erred in facts and in law in confirming the aforesaid addition in the hands of the assessee. I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 8 6. In the result, ground number 1 of the assessee’s appeal is dismissed. Ground number 2: Ld. CIT(Appeals) erred in confirming disallowance of 2,21,745/ - u/s 40(a)(ia) of the Act 7. The brief facts in relation to this ground of appeal are that during the course of assessment, the AO observed that the assessee had made interest payment to 11 parties without deducting tax at source as per the provisions of section 194A of the Act. Accordingly, the AO made a disallowance of the aforesaid amount of 2,21,745/- u/s 40(a)(ia) of the Act. 8. In appeal, Ld. CIT(Appeals) dismissed the appeal of the assessee on the ground that during the course of assessment, the assessing officer had found certain discrepancies in the information furnished by the assessee, which still remained uncontroverted during the course of appellate proceedings as well. Accordingly, in absence of any argument made by the assessee with regards to disallowance made by the AO, Ld. CIT(Appeals) confirmed the assessment order with the following observations: “The AO has made the disallowance of Rs. 2,21,745/- u/s 40(a)(ia) of the Act contending that appellant had made interest payment to 11 parties without deducting TDS as per provisions of section 194A of the Act. Appellant had furnished form No. 15G/15H in which the 11 persons names were not appearing. The AO therefore held that interest payment of Rs,2,21,74s/- is not allowable to the appellant and made the disallowance and addition to the total income. Further, in the remand report, AO has reported that in the case of Shri Ramesh D. Thakkar since the loan, on which interest was given was disallowed u/s 68 of the Act, hence interest expenses cannot be allowed in the of the present appellant. The AO had also summons to verify the signatures of the person concerned. The I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 9 AO found that signatures in all the differed. One Shri Rasiklal C Thakkar who attended the AO and statement recorded confirmed that he cannot read or write either English or Hindi. In Form No. 15H Shri Thakkar had signed in English. As such the AO has contended that in all Form No. 15H, one person had made the signature. Even appellant could not rebut this argument of the A.O. In such of the matter, in absence of any argument by the appellant in this the disallowance by the AO is held justified and the disallowance of Rs.2,21,745/- u/s 40(a)(ia) of the Act is confirmed. The relevant ground of appeal is rejected. " 9. On going to the facts of the case, we observe that the assessee had made interest payment to several parties without deduction of tax at source. Before Ld. CIT(Appeals), the assessee made no specific arguments to controvert the findings made by the assessing officer and gave no specifics explanation for non-deduction of tax at source. Accordingly, we are of the considered view that Ld. CIT(Appeals) has not erred in facts and in law in confirming the disallowance made by the assessing officer on account of non-deduction of tax on interest payments by the assessee. 10. In the result, ground number 2 of the assessee’s appeal is dismissed. Ground number 3: Ld.CIT(Appeals) erred in confirming addition of 1,80,000/- under section 24 of the Act 11. The brief facts in relation to this ground of appeal are that during the course of assessment, the assessing officer observed that the assessee had shown receipts of 6 lakhs from Tata Projects Ltd. under the head “income from house property” and deduction under section 24 of the Act was claimed by the assessee amounting to 180,000/-. However, on further verification of TDS details, the AO observed that the payments received from Tata I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 10 Projects Ltd. were shown as professional/technical fees by the assessee and tax was deducted on the said payments under section 194J of the Act by the payer. Accordingly, the AO made a disallowance of 180,000/-and added the same to the income of the assessee on the ground that this amount cannot be claimed by way of deduction u/s. 24 of the Act. 12. In appeal, Ld. CIT(Appeals) observed that on verification of facts it emerged that Tata Projects Ltd had made payment of 6 lakhs to the assessee after deducting tax at source under section 194J of the Act, as professional/ technical fee. Accordingly, the income against which deduction under section 24 of the Act was claimed by the assessee is not “income from house property”. Accordingly, the AO had correctly disallowed the claim of deduction under section 24 of the Act amounting to 1,80,000. While confirming addition, Ld. CIT(Appeals) made the following observations: “On the other hand appellant has contended that it had Rs.6,00,000/- and such income in its return of income and Profit & Loss account of the appellant which were also subject to tax under section 44 AB of the Income tax Act, Tax was deducted by third party and had filed its return of TDS independently. It has contended that it received the rental income and claimed deduction u/s 24 of the Income Tax Act and took credit of TDS deducted at source. It is argued by the appellant that as income was received as rental income which is credited in the books of appellant and also offered for taxation in the year under consideration, hence claim of section 24 of the Income Tax cannot he denied, Further, it is contended AO assumed nature of income on the basis of mistake committed by third party and ignored actual facts of the appellant which were available for verification and verified also with no any adverse remarks ad also n such evidence/nature of income rejected. On careful consideration of the entire facts, I find that AO has in the remand report that appellant has furnished copy of Form No.l6A by TA'TA Projects Ltd in which the nature of payments shown "1941 & Payment of Fees to I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 11 profession or Technical Services", In . 26AS details it is TATA Projects Ltd has made the payment u/s 194j of the Act and deduct the TDS accordingly and therefore, the claim by the u/s 24 of the Act of Rs.1,80,000/- is not allowable to the appellant. In view of the clear cut finding given by the AO on the of documentary evidences; which the appellant has not been able to controvert with documentary evidences, the action of the AO in making the disallowance of Rs.1,80,000/- is held justified and is hereby confirmed. The relevant ground of appeal is therefore, rejected.” 13. On going to the facts of the case and the material on record, we observe that Ld. CIT(Appeals) has correctly observed that the assessing officer, on the basis of documentary evidences had confirmed the aforesaid additions. Further even before the Ld. CIT(Appeals) in appellate proceedings, the assessee has not been able to counter with documentary evidences, the action of the AO in making the disallowance of 1,80,000 /-. Accordingly, looking into the facts of the case, we are of the considered view that Ld. CIT(Appeals) has not erred in facts and in law in confirming the aforesaid addition. 14. In the result, ground number 3 of the assessee’s appeal is dismissed. Ground number 4: Ld. CIT(Appeals) erred in confirming 1250/- on account of donation expenses 15. The brief facts in relation to this ground of appeal are that during the course of assessment, the assessing officer disallowed a sum of 7,400/ - claimed as deduction by the assessee under section 80G of the Act. In appeal, Ld. CIT(Appeals) after taking into the account documentary placed I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 12 on record by the assessee, restricted the disallowance to 1,250, by making the following observations: “9.4 l have considered the facts of the case assessment order, submission made by the appellant and the contention of the AO in the report. The AO in the remand report has reported that in respect of claim of Rs.7,400/- u/s 80G of the Act, appellant has submitted the original receipt of donation of Rs,7,200/- and Rs.5,100/-along copy of letter for grant of approval of renewal u/s 80G(5) of the Act and therefore appellant is entitled for deduction u/s 80G of Rs.6,150/- instead of Rs.7,400/-. In view of the report of the AO, the disallowance made by the AO of Rs.7,400/- is restricted to Rs.6,150/-, Appellant gets appropriate relief. The ground of appeal is allowed in part.” 16. On going to the facts of the instant case and the observations made by Ld. CIT(Appeals), we are of the considered view that Ld. CIT(Appeals) has taken into consideration the material placed on record by the assessee during the course of appellate proceedings, and has appropriately given relief to the assessee on the basis of documents furnished. Accordingly, we find no infirmity in the order of Ld. CIT(Appeals) so as to call for any interference. 17. In the result, ground number 4 of the assessee’s appeal is dismissed. Ground number 5: Ld. CIT(Appeals) erred in confirming addition on account of interest expenses of 1, 87, 418/- 18. The brief facts in relation to this ground of appeal are that during the course of assessment, the assessing officer observed that assessee had earned interest income from four parties amounting to 1,87,418/-, which was not offered to tax by the assessee in the return of income. Accordingly, the AO added the above amount as income of the assessee. In appeal, Ld. I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 13 CIT(Appeals) confirmed addition on the ground that the assessee has not produced any evidence in support of its contention to controvert the findings made by the Ld. Assessing Officer. Accordingly, CIT confirmed the additions the following observations: “10.4 I have considered the facts of the assessment order, submission made by the appellant and the contention of the AO in the remand report. Appellant in the remand report has reported that appellant had not submitted any details in respect of the on account on interest income of Rs.1,87,814/-. From the facts of the case, it is dear that appellant though was given opportunity to produce evidences in respect of the claim of interest income, it failed to produce any evidences before the AO. No claim can be allowed without producing documentary evidences. Since appellant has not produced any evidences in spite of giving opportunities, the claim cannot be allowed and the disallowance of Rs.1,87,814/- is hereby confirmed. The relevant ground of appeal is rejected.” 19. On going to the facts of the instant case and the observations made by Ld. CIT(Appeals) in the appellate order, we are of the considered view that Ld. CIT(Appeals) has not erred in facts and in law in confirming the addition, looking into the facts of the instant case. 20. In the result, ground number 5 of the assessee’s appeal is dismissed. 21. In the result, all Grounds of Appeal of the assessee are dismissed for assessment year 2010-11. Now we shall take up assessee’s appeal for assessment year 2011-12 22. Ground numbers 1 to 3 of the assessee’s appeal are general in nature and do not require any specific adjudication. I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 14 Ground number 4: Ld. CIT(Appeals) erred in confirming the disallowance of 10,28, 471/ - u/s 40(a)(ia) of the Act 23. During the course of assessment, the assessing officer disallowed a sum of 10,28,471 u/s 40(a)(ia) of the Act on the ground that assessee had not deducted TDS on interest payment made to 19 parties. Before the AO, the assessee did not file any details or furnish any reasons for non-reduction of TDS on interest payment to 19 parties. Accordingly, the AO made a disallowance of 10, 20,471/-and added the same to the total income of the assessee. 24. In appeal, Ld. CIT(Appeals) confirmed the addition with the following observations: “5.2 I have considered the facts of the case and the assessment order. AO has made the disallowance of Rs. 10,28,47l/- as appellant failed to furnish Form No.15G/15H or any satisfactory explanation for non-deduction of TDS on the interest payment made to the above extent as was mandatory as per section 194A of the Act. Even during the course of appellate proceedings, as is recorded in para.2 of this order, many opportunities were granted to the appellant to argue its case, which the appellant has failed to avail. In such circumstances, it is presumed that appellant do not have any explanation for non-deduction of TDS as was required as per Section 194A of the Act” 25. On going to the facts of the instant case, we are of the considered view that Ld. CIT(Appeals) has rightly confirmed the addition in absence of any details being furnished by the assessee either before the AO or before Ld. CIT(Appeals) during the course of appellate proceedings and not furnishing any reason for non-deduction of tax at source. I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 15 26. In the result, ground number 4 of the assessee’s appeal is dismissed. Ground number 5: Ld. CIT(Appeals) erred in confirming disallowance of job work charges of 5, 23, 165/- 27. The brief facts in relation to this case are that the assessee had given job work to M/s Amba Oil industries for the job work of Kapasia crushing. During the course of assessment, the AO observed that assessee had not deducted TDS on job work expenses of 5,23,465/- paid to the aforesaid party. During the course of assessment, the AO did not furnish any details and remained absolutely silent regarding the issue of non-deduction of tax at source on payments made towards job work expenses. Accordingly, the Ld. Assessing Officer made the above disallowance in the hands of the assessee. 28. In appeal, Ld. CIT(Appeals) observed that the assessee did not file any details/give any submission with respect to non-deduction of tax at source, with respect to job work expenses. 29. Looking into the facts of the instant case and the observations made by CIT in the appellate order, we are of the considered view that Ld. CIT(Appeals) has not erred in facts and in law in confirming the aforesaid disallowance in absence of any explanation/documentary evidence having been submitted by the assessee during the course of assessment proceedings or in appellate proceedings before Ld. CIT(Appeals). 30. In the result, ground number 5 of the assessee’s appeal is dismissed. I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 16 Ground number 6: Ld. CIT(Appeals) erred in confirming disallowance of 6, 55, 960/ -under section 40A(3) of the Act 31. The brief facts in relation to this ground of appeal are that during the course of assessment, the assessing officer observed that the assessee had made payments of 6,35,960/- on account of job work expenses in cash, in contravention provisions of section 40A(3) of the Act, which mandates that payments exceeding 20,000 be made through account payee cheque or demand draft. 32. In appeal, Ld. CIT(Appeals) confirmed the addition on the ground that during the course of appellate proceedings, the assessee gave no explanation regarding making payments in cash in violation of the provisions of section 40A(3) of the Act. Accordingly, he confirmed the additions with the following observations: “7.2 I have considered the facts of the case and assessment order. AO has made the addition of Rs.6,35,960/- as appellant had made cash payments exceeding Rs.20,000/- in cash otherwise than by banking channels and for such cash payment, appellant had not submitted any reasons or circumstances. In such facts, AO made the disallowance. Even during the appellate proceedings, appellant has not attended the proceedings before the undersigned to submit the reasons or circumstances for making such a huge payment in cash. In such circumstances, the disallowance and addition made by the AO of Rs.6,35,960/- u/s 40A(3) of the Act is hereby held justified and is confirmed; Relevant ground of appeal is rejected.” 33. Accordingly, looking into the facts of the instant case and the observations made by CIT in the appellate order, we are of the considered view that Ld. CIT(Appeals) has not erred in facts and in law in confirming I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 17 the aforesaid disallowance in absence of any explanation/documentary evidence having been submitted by the assessee during the course of assessment proceedings or in appellate proceedings before Ld. CIT(Appeals). 34. In the result, ground number 6 of the assessee’s appeal is dismissed. Ground number 7: Ld. CIT(Appeals) erred in confirming disallowance for donation expenses of 9,750/- 35. The brief facts in relation to this ground of appeal are that during the course of assessment, the AO noticed that the assessee had remitted a sum of 49,350/- towards donation expenses to a charitable trust, however, no documentary evidences were furnished in respect of donation of 9750/- before the AO. Accordingly, AO made a disallowance of 9,750/- and added the same to the income of the assessee. 36. In appeal, Ld. CIT(Appeals) confirmed the addition on the ground that the assessee did not attend and did not produce any evidence with regard to the donation expenses of 9750/-. 37. On going to the facts of the case and the observations made by the CIT in the appellate order, we are of the considered view that Ld. CIT(Appeals) has not erred in facts and in law in confirming the above addition in absence of any documentary evidences having been furnished by the assessee either during the course of assessment order during the course I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 18 of appellate proceedings before Ld. CIT(Appeals) with respect to the aforesaid donation. 38. In the result, ground number 7 of the assessee’s appeal is dismissed. Ground number 8-12 39. The brief facts in relation to the above additions are that the assessee incurred several expenses like telephone expenses, travelling expenses, vehicle expenses, petrol and diesel expenses and depreciation expenses etc. During the course of assessment, the assessing officer made disallowance to the extent of 10% with respect to the aforesaid expenses on account of personal use, since despite having been provided adequate opportunities, the assessee failed to produce any documentary evidence is in respect of the aforesaid expenses. 40. The aforesaid additions were confirmed by the Ld. CIT(Appeals) in appellate proceedings on the ground that despite having been afforded opportunity of hearing, the assessee did not furnish any documentary evidence in support of the aforesaid expenses. 40.1 Accordingly, looking into the facts of the instant case and the observations made by Ld. CIT(Appeals) in the appellate order, we are of the considered view that Ld. CIT(Appeals) has not erred in facts and in law in confirming the aforesaid additions to the extent of 10% in absence of any details forthcoming from the assessee. I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 19 40.2 In the case of CIT v. K.L. Bhasin & Co.[1986] 158 ITR 623 (Patna High Court), the High Court on disallowance of depreciation on motor cars on account of personal use, observed as below: It is well established that the partners cannot be considered as a separate entity from the firm. Hence, the contention that the partners and not the assessee-firm were using the cars for private purposes and there could, therefore, be no disallowance of depreciation to the assessee could not be accepted. On reading the provisions of section 38(2), it is clear that if a plant is partly used for the business purposes and partly used for non-business purposes then the disallowance in depreciation has to be made proportionately. In the instant case, the Tribunal had sustained a disallowance out of the car expenses to the extent of about one-fourth for personal use of the cars by the partners. However, no reference under section 256 had been made relating to the disallowance of car expenses. Hence, the order of the Tribunal disallowing about one-fourth of the expenses relating to the cars had become final under section 254(4). Under such circumstances, the fair proportion for disallowance of depreciation should be one-fourth for use of the cars for private purposes. Again, it was undisputed that the Tribunal had held in its order that all the cars were used for the business purposes as well as for the private purposes. Therefore, the Tribunal was not justified in allowing the entire depreciation claimed by the assessee and it should have disallowed one-fourth of the depreciation claimed. I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 20 40.3 In the case of Virendra K. Mehta v ACIT [2007] 106 ITD 437 (Mumbai), the Mumbai Tribunal made the following observations on disallowance of depreciation account of personal use of motor vehicles: It is a fact that in the assessment of the firm, Assessing Officer had held that 1/5th of the expenditure on motorcar is to be treated as personal in nature in the hands of the appellant i.e., the partner of the said firm. According to us, it is a case that the motorcars owned by the appellant and used for the business of the firm in which he is a partner have also partially been used for personal purpose, when an addition has been made on this ground in the hands of the firm. With this view, we hold that it would be reasonable to disallow 1/5th of the depreciation on the motorcars owned by the assessee in respect of which depreciation has been claimed and which have been used by the firm in which the appellant is a partner. For this position, there is a specific provision under section38(2), as per which when an asset is not exclusively used for the purpose of business, the Assessing Officer shall restrict the claim for depreciation to a fair proportion of the purpose for which the asset is used for the purpose of business or profession. Assessing Officer in the assessment of the firm having held that 1/5th as the estimated proportion in respect of which the motorcars are not used exclusively for the purpose of business of the firm, following the same, we direct that 4/5ths of the claim for depreciation be allowed in the hands of both the appellants, the facts being the same. 40.4 We find that Mumbai ITAT in the case of SSK Engineering Works (supra) has restricted the disallowance of depreciation on motor vehicles to 10%, on similar set of facts, with the following observations:- “4. As regards ground Nos. 2 & 3 relating to the disallowance made out of motor-car expenses and depreciation on motor-car, it is observed that no record I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 21 in the form of log book etc. was maintained by the assessee's to show that the said expenses were wholly and exclusively incurred for the purposes of its business. Since the use of motor cars of the assessee firm by its partners for personal purpose, could not be ruled out, the Assessing Officer made a disallowance of 20% out of motor-car expenses and depreciation on motor-car on motor-car on account of such personal use. On appeal, the learned CU(A) restricted the said disallowance to 10%. 5. After having considered all the facts of the case, we are of the view that the disallowance sustained by the learned CIT(A) at 10% of the total expenses incurred by the assessee on motor-car and depreciation on motor-car for personal use is quite fair and reasonable and no further relief on this issue to the assessee is warranted. We, therefore, uphold the impugned order of the Learned CIT(A) on this issue and dismiss ground Nos. 2 & 3 of the assessee's appeal.” 41. Accordingly, looking into the facts of the instant case and the judicial precedents on the subject as highlighted above, we are of the view that Ld. CIT(Appeals) has not erred in facts and in law in confirming the disallowance made by the assessing officer to the extent of 10% of those expenses, in absence of any documentary evidence having been placed on record by the assessee either during the course of assessment proceedings or appellate proceedings. 42. In the result Grounds 8-12 of the assessee’s appeal are dismissed. 43. In the result, appeal of the assessee is dismissed for assessment year 2011-12. I.T.A Nos. 1988 & 1989/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Amba Industries vs. ITO 22 44. In the combined result, the appeal of the assessee is dismissed for both assessment years 2009-10 and 2010-11. Order pronounced in the open court on 05-07-2023 Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 05/07/2023 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/ आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद