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TMI Blog2012 (7) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... ounds of appeal: i) The Ld. Commissioner of Income Tax (Appeals) erred in law and on the facts and circumstances of the case in deleting the addition of a total amount of Rs. 20,06,556/- made by the Assessing Officer as unexplained cash credits under section 68 of the Income Tax Act, 1961 without cogent reasons in accepting the plea of the appellant that these cash credits were opening balance in spite of the objection raised by the Assessing Officer in remand report dated 11.2.2011 that the confirmations filed by the appellant before the Ld. Commissioner of Income Tax (Appeals) were incomplete, lacking address and PA Number as also the Assessing Officer had doubted the sales claimed to have been made to the parties in the F.Y. 2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e aforesaid grounds of appeal and amend, alter or add any other ground of appeal." 3. In this case the assessee is an individual carrying on the business of wholesale trading in various types of metals. The return of income for A.Y. 2007-08 was filed on 22.10.2007, disclosing income of Rs. 1,14,407/-. The case was taken up for scrutiny by issue of notice u/s. 143(2) on 29.9.2008. during the assessment proceedings, the Assessing Officer issued notices u/s. 133(6) to verify the genuineness of the sundry creditors, of a total amount of Rs. 49,30,540/-. Four of the notices were received back unserved, with the postal authorities stating that no such parties existed at the addresses, or that the address was incomplete. In five cases, no reply w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irmation - Rs. 19,757/-. 10)M/s Vikas Industries, as appellant's claim that debit note was pending for poor material was not supported by evidence - Rs. 83,088/-. 11)M/s Asia Metal - Rs. 1,72,720/-. 12)M/s B.K. Foundry Works - Rs. 1,03,000/-. 13)M/s Super Castings - Rs. 1,15,728/- In the above three cases, the assessee claimed it had received advances for supply of material, which were returned in later years, but could not prove its case. 14)M/s Hitech Enterprises - Rs. 10,60,156/-. 15)M/s Shree Kripa Electrical and Engineering Co. - Rs. 7,46,000/-. In the above 2 cases, the confirmations filed did not have PAN or address. 4. Before the Ld. Commissioner of Income Tax (Appeals) assessee filed an application requesting for admission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 7,81,950/- as on 1.4.2006, out of advances received vide three cheque amounts in F.Y. 2005-06. After payment of Rs. 35,950/- by the appellant during the year, the closing balance is Rs. 7,46,000/-. 2) M/s Hitech Enterprises - During the F.Y. 2004-05, the appellant has received advances amounting to Rs. 20,58,500/- and made sales of Rs. 8,98,343/-. Out of the opening balance of Rs. 11,60,156/- on 1.4.2006, the appellant has paid back an amount of Rs. 1,00,000/- during the year, and the closing balance is Rs. 10,60,156/-. This amount was settled through supply of material in the F.Y. 2009-10. 3) M/s Aqsa Trading Co. - Out of the opening balance on 1.4.2006 of Rs. 1,20,177/- the appellant has paid Rs. 60,000/- during the year, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x (Appeals) held that considering that the amounts have been confirmed by the parties concerned, the additions of the above sums, totaling Rs. 8,06,805/- was deleted. 4.4 Further, Ld. Commissioner of Income Tax (Appeals) noted that in the case of Super Castings, it is seen that the assessee has received advances/ payments of Rs. 3,32,393/- by cheque during the year, and made sales of Rs. 2,16,665/-. In the following year (F.Y. 2007-08), the assessee has received payments of Rs. 2,62,220/- and made sales of Rs. 2,11,980/-. Ld. Commissioner of Income Tax (Appeals) held that the payments were received by cheque and the transactions appear to be in nature of regular business dealings. He also held that the credit balance as on 31.3.2007 of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n dated 23.12.2011 in the case of C.I.T. vs. Vardhman Overseas Ltd.. In this case the Hon'ble High Court has confirmed the ITAT decision to the effect that addition u/s. 68 cannot be made when there are no fresh cash credits received during the year from sundry creditors and section 41(1) and section 28(iv) cannot be invoked to subject to tax the outstanding balances of sundry creditors. 6.3 We have carefully considered the submissions and perused the records. We agree with the finding of the Ld. Commissioner of Income Tax (Appeals) that assessee was prevented by sufficient cause from submitting the evidences during the assessment proceedings. Furthermore, we agree with the Ld. Commissioner of Income Tax (Appeals) that addition could not h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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