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2016 (9) TMI 1142 - AT - Income TaxUnexplained sundry creditors - Held that - The documents available on record relied upon before the AO the CIT(A) have been taken into consideration. We find that in the absence of any argument assailing the same the finding of the CIT(A) that the addition deserves to be deleted cannot be faulted with. It is seen that the conclusion drawn that the sundry creditors had not directly confirmed to the AO was found to be incorrect. Further the non-receipt of a response to notice under section 133(6) from M/s Ajanta Transport, Kolkata, the assessee has explained it by stating that the notice was sent to an incomplete address. The same has been confirmed by the said party and the evidences have also been confirmed by way of an email. In the absence of any infirmity pointed out by the Revenue, the Departmental ground is dismissed. Addition u/s 69C - unexplained expenditure of commission - confirmation from commission agents that they had rendered services and receive the said amounts - Held that - Sri Vinod Maheshwari and Mrs. Urvashi Maheshwari at the relevant point of time aged 40 and 38 are stated to have 20 years and 12 years experience in dealing in petroleum products and their qualifications were B.Com. and B.A. respectively. The services rendered have been explained that they booked orders of petroleum products for Modern Chemicals effecting sales to the tune of ₹ 52,69,216/- and ₹ 36,76,469/- by Mr. Vinod Kumar Maheshwari and Smt. Urvashi Maheshwari respectively. Accordingly on a consideration of the peculiar facts, circumstances, evidences and the material on record, we find no good reason to interfere with the finding arrived at in deleting the addition - Decided in favour of assessee.
Issues:
1. Addition of unexplained sundry creditors 2. Disallowance of commission allegedly paid 3. Deletion of additions by CIT(A) 4. Appeal by Revenue against CIT(A) order Issue 1: Addition of unexplained sundry creditors The Revenue challenged the deletion of an addition of ?2,89,20,989 towards unexplained sundry creditors by the CIT(A). The Assessing Officer had made the addition as the firm failed to prove the genuineness, creditworthiness, and identity of the creditors. The assessee submitted confirmations directly from the creditors, including Paswara Impex Ltd. and Petrolube India Ltd., along with other evidences. The CIT(A) found the addition unjustified as confirmations were provided and notices sent to parties like Ajanta Transport, Kolkata, were explained to have been sent to incomplete addresses. The Tribunal upheld the CIT(A)'s decision, dismissing the Revenue's appeal. Issue 2: Disallowance of commission allegedly paid The Revenue contested the deletion of a disallowance of ?5 lakhs towards commission paid to individuals. The AO required proof of services rendered by Mrs. Urvashi Maheshwari and Sh. Vinod Maheshwari, but the assessee failed to provide satisfactory evidence. However, the CIT(A) deleted the addition, stating that qualifications and services of the individuals were adequately explained with supporting documents. The Tribunal found no reason to interfere with the CIT(A)'s decision, dismissing the Revenue's appeal against the deletion of the commission disallowance. Issue 3: Deletion of additions by CIT(A) The CIT(A) deleted both the addition of unexplained sundry creditors and the disallowance of commission payments. The Tribunal upheld the CIT(A)'s decisions, emphasizing that confirmations and evidence were provided to justify the transactions. The Tribunal found no fault in the CIT(A)'s reasoning and concluded that the additions were correctly deleted. Consequently, the Revenue's appeal against the CIT(A)'s order was dismissed. Issue 4: Appeal by Revenue against CIT(A) order The Revenue's appeal against the CIT(A)'s order, which deleted the additions made by the Assessing Officer, was dismissed by the Tribunal. The Tribunal found the CIT(A)'s decisions well-founded based on the evidence and explanations provided by the assessee. The Tribunal upheld the deletion of the additions, emphasizing the adequacy of the documentation and confirmations submitted. Therefore, the Tribunal upheld the CIT(A)'s order, resulting in the dismissal of the Revenue's appeal. This detailed analysis covers the issues raised in the legal judgment, providing a comprehensive overview of the arguments, decisions, and reasoning involved in each issue.
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