2021 (8) TMI 172 - AT - Income Tax

Addition as sundry creditors - AR submitted that during the remand proceeding on demand of Assessing Officer, the assessee furnished complete address along with PAN details of sundry creditors - HELD THAT - As during the remand proceedings the assessee has furnished complete address along with PAN details of Sundry Creditors. During the assessment proceedings as well as the confirmations u/s 133(6) was received directly from Sundry Creditors along with details of ITR of Sundry Creditors from the respective words of the Income Tax. Thus, the identity, creditworthiness was established and through the details filed before the Assessing Officer as well as CIT(A). The assessee has demonstrated the genuineness of the creditors. Therefore, the CIT(A) was not right in confirming the addition that of Sundry Creditors. Addition of advances from customers the remand report has not disputed the confirmations received from the creditors and the advances obtain was a genuine loan from the customers - HELD THAT - Assessee has establish genuineness of all the transactions, identity of creditors and source of the funds received. Assessing Officer has totally ignored all these facts while filing the remand report on the contrary he has acknowledged that to establish genuineness, identity and creditworthiness. The assessee has filed the documents which are relevant to these three factors - CIT(A) has ignored the evidences and simply confirm the additions. Thus, the record shows that the assessee has establish genuineness of all the transactions, identity of the customers from whom the addition has been taken and also the source of funds received for obtaining these additions. Therefore, Ground No. 2 is allowed. Credit balance in current account of ICICI Bank - HELD THAT - Bank has confirmed the said credit balance with the letter before the Authorities and the same is confirmed by the Assessing Officer in his remand report dated 18/7/2012. Thus, the credit balance in current account has been established by the assessee to the proper evidences. Gold Shortage - HELD THAT - As assessee has given the details of the gold transactions and the same was clarified by the Directors of the assessee. It was not disputed by the Assessing Officer in his remand report dated 16/7/2012. Therefore, the finding given by the CIT(A) is contrary finding to that of the evidences brought on record by the assessee. Hence, Ground No. 4 is allowed

Summary

Issues:
1. Addition of sundry creditors
2. Addition of advance from customers
3. Addition of credit balance in ICICI Bank
4. Addition of gold shortage
5. Disallowance of discount
6. Disallowance of expenses

Issue 1: Addition of Sundry Creditors
The Assessing Officer disallowed Rs. 1,28,02,536 as sundry creditors, considering them as bogus liabilities. The CIT(A) confirmed this addition. During the remand proceedings, the assessee provided complete details of the creditors, including PAN and confirmations. The Assessing Officer obtained confirmations directly from the creditors. The Tribunal found that the identity and creditworthiness of the creditors were established, thus allowing Ground No. 1.

Issue 2: Addition of Advance from Customers
An addition of Rs. 24,13,787 as advance from customers was made by the Assessing Officer. The CIT(A) upheld this addition. However, during the remand proceedings, confirmations from creditors were not disputed. The Tribunal noted that the genuineness of the transactions, identity of creditors, and the source of funds were established. Ground No. 2 was allowed.

Issue 3: Addition of Credit Balance in ICICI Bank
The Assessing Officer added Rs. 19,78,909 as credit balance in the ICICI Bank account. The Tribunal found that the bank confirmed this balance, and the Assessing Officer acknowledged this in the remand report. Ground No. 3 was allowed.

Issue 4: Addition of Gold Shortage
An addition of Rs. 13,89,000 for gold shortage was made by the Assessing Officer. The Tribunal noted that the details provided by the assessee were clarified and not disputed by the Assessing Officer in the remand report. Ground No. 4 was allowed.

Issue 5: Disallowance of Discount
The disallowance of Rs. 5,67,287 as discount was confirmed by the CIT(A). However, the Tribunal found that the assessee provided satisfactory clarification, which was not disputed in the remand report. Ground No. 5 was allowed.

Issue 6: Disallowance of Expenses
An amount of Rs. 3,13,682 was disallowed as expenses by the Assessing Officer. The Tribunal noted that vouchers for the expenses were produced by the assessee, and the expenses were clarified. Ground No. 6 was allowed.

In conclusion, the Tribunal allowed the appeal of the assessee, overturning the additions and disallowances made by the Assessing Officer and confirmed by the CIT(A).

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