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2018 (12) TMI 462 - AT - Income TaxAddition on account of difference of commission - scrutiny assessment - unexplained sundry creditors - Held that - Information u/s 133(6) of the Act was called by A.O himself from the alleged creditor Shivalik Vyapar Pvt. Ltd to which reply was received along with three separate amounts out of which in one of the account namely M/s Harisons debit balance was shown at 2, 39, 10, 415/- whereas in the assessee s books of accounts the balance has been shown at 2, 39, 33, 988/-. This fact has been well noted by the A.O himself in the assessment order. It seems that due to inadvertence he mentioned in para 5 of the assessment order that the confirmation of account has not been received from Shivalik Vyapar Pvt. Ltd and due to this mistake on the part of the Ld.A.O addition of 2, 39, 33, 988/- was made. CIT(A) rightly appreciated the facts coming to the conclusion that there was only a difference of 23, 573/- which was on account of difference of commission and apart from this there was no other difference in the account balance with the sundry Creditor Shivalik Vyapar Pvt. Ltd. - decided against revenue Difference in the sale account of Shivalik Vyapar Pvt. Ltd. - confirmation of account received from M/s Shivalik Vyapar Pvt. Ltd there was a closing balance at 68, 28, 938/- whereas NIL balance was appearing in the balance sheet of the assessee - Held that - CIT(A) deleted this addition after detailed examination of the fact that the alleged balance was on account of Bank of Baroda LC which was issued by M/s Shivalik Vyapar Pvt. Ltd for purchasing goods from the assessee and the alleged amount is merely a journal entry through which the alleged amount has been credited in the books of M/s Shivalik Vyapar Pvt. Ltd and corresponding debit to Bank of Baroda LC account which is balance payable by M/s Shivalik Vyapar Pvt. Ltd to the bank. In fact there is no balance amount receivable by the assessee from M/s Shivalik Vyapar Pvt. Ltd. The above findings of CIT(A) has not been controverted by Ld. Departmental Representative and the fact emanating out of this finding are duly verifiable with the copy of ledger account placed - no inconsistency in the findings of Ld.CIT(A) deleting the addition. Admission of additional evidence without following rule 46A of the I.T Act and not calling for remand report of the A.O needs to be dismissed in the given facts where it is proved beyond doubt that all the necessary details were directly called for by A.O from the alleged sundry creditors by issuing notice u/s 133(6) of the Act which were duly complied. We accordingly dismiss Ground No.3 of revenue s appeal. Addition u/s 68 - Held that - CIT(A) has not been controverted by Ld. Departmental Representative and it is duly discernable from the records that Ld. A.O though was having necessary conformation of account received from M/s. Shivalik Vyapar Pvt. Ltd in his records called by him under the information u/s 136(6) of the Act but it seems that due to inadvertence he ignored the same which lead to the alleged addition which has been rightly deleted by Ld.CIT(A). No interference is therefore called for in the finding of Ld.CIT(A) deleting the addition of 2, 44, 74, 156/-. We accordingly dismiss Ground No.1 raised by the Revenue. Addition on account of creditors - Held that - Confirmation of amounts of all the alleged five creditors have been examined by the first appellate authority and there is no dispute to the fact that the payment to these creditors have been made through proper banking channel in the succeeding financial year. No interference is therefore called for in the finding of Ld.CIT(A) deleting the addition of 38, 49, 923/- and the same is upheld.
Issues Involved:
1. Restriction of addition in respect of sundry creditors. 2. Deletion of addition based on creditors. 3. Acceptance of additional evidence without following Rule 46A. 4. Deletion of addition made on account of profit estimated by A.O. Detailed Analysis: I.T.A. No.233/Ind/2017 - Shri Kishore Hariram Paryani (HUF): 1. Restriction of Addition in Respect of Sundry Creditors: - The Ld. CIT(A) restricted the addition to ?23,573 as against the addition of ?2,39,33,988 for unexplained sundry creditors. The Ld. CIT(A) found that the AO had called for information under section 133(6) from the creditor, Shivalik Vyapar Pvt. Ltd, which confirmed the balances except for a minor difference of ?23,573 due to commission discrepancies. Thus, the Ld. CIT(A) concluded that the addition should be limited to the minor discrepancy amount. 2. Deletion of Addition Based on Creditors: - The Ld. CIT(A) deleted the addition of ?68,28,938. The AO had observed a discrepancy between the balance shown by Shivalik Vyapar Pvt. Ltd and the assessee’s books. However, the Ld. CIT(A) found that the discrepancy was due to a journal entry related to Bank of Baroda LC, which did not affect the actual balance between the parties. The Ld. CIT(A) thus concluded that no addition was warranted. 3. Acceptance of Additional Evidence Without Following Rule 46A: - The revenue contended that the Ld. CIT(A) accepted additional evidence without following Rule 46A. However, the Tribunal found that all necessary details were directly called for by the AO under section 133(6) and were duly complied with. Therefore, the Tribunal dismissed this ground. 4. Deletion of Addition Made on Account of Profit Estimated by A.O.: - This ground was general in nature and required no specific adjudication, thus it was dismissed. I.T.A. No.234/Ind/2017 - Shri Prince Paryani: 1. Deletion of Addition on Account of Creditors: - The Ld. CIT(A) deleted the addition of ?2,44,74,156. The AO had made an addition assuming a discrepancy between the balance shown by Shivalik Vyapar Pvt. Ltd and the assessee’s books. The Ld. CIT(A) found that the AO had compared different accounts incorrectly and that the balances actually matched. Thus, the Ld. CIT(A) concluded that no addition was warranted. 2. Deletion of Addition of ?38,49,923 on Account of Creditors: - The AO had made an addition for five sundry creditors under section 68. The Ld. CIT(A) deleted this addition after examining the confirmations of amounts from all five creditors and verifying that payments were made through banking channels in the succeeding financial year. Thus, the Ld. CIT(A) found no discrepancy warranting the addition. 3. Acceptance of Additional Evidence Without Following Rule 46A: - Similar to the case of Shri Kishore Hariram Paryani (HUF), the Tribunal found that the necessary details were directly called for by the AO and were duly complied with. Therefore, this ground was dismissed. 4. Deletion of Addition Made on Account of Profit Estimated by A.O.: - This ground was general in nature and required no specific adjudication, thus it was dismissed. Conclusion: Both appeals of the revenue (ITA No.233/Ind/2017 and ITA No.234/Ind/2017) for Assessment Year 2012-13 were dismissed. The Tribunal upheld the findings of the Ld. CIT(A) in all respects, confirming the deletions and restrictions of additions made by the AO. The order was pronounced in the open Court on 06.12.2018.
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