9911796707
TMI Blog2012 (10) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax (Appeals) is against facts and circumstances of the case. 2. The learned CIT(A) erred in deleting the disallowance of Rs. 71,10,181/- on account of unproved trade creditors. 3. The learned CIT(A) erred in deleting the additions made on the ground that the additions were made in the assessment order based un the report of the Inspector and that no further enquiries were made by the Assessing Officer. 4. The learned CIT(A) erred in observing that all the transactions relate to the previous year relevant to the assessment year 2005-06 which cannot be disallowed in the year under consideration. 5. The learned CIT(A) failed to appreciate that the additions were made only after detailed enquiries, such as existence of the trade cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) Disallowance on account of reprocessing charges Rs. 2,60,000 (iii) Disallowance on account of discount Rs. 1,55,857 4. Aggrieved, the assessee went before the ld. CIT(A), who has deleted the entire additions made by the Assessing Officer. Now, the Revenue is aggrieved. 5. We have considered the rival submissions and have perused the entire material available on record. The assessee carries on the business as a leather tanner under the trade name 'G.R. Leathers' as a proprietary concern. The assessment order was passed on 31.12.2009 determining total income of Rs. 79,24,328/-. After hearing both sides, we have found that the disallowances on account of trade creditors standing in the names of M/s Mohamed & Co., M/s Yanam Abdul Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of the assessee is that the additions are made on the basis of the report of the Income-tax Inspector that there is no concern by such name but the assessee had filed before the Assessing Officer purchase and sale bills of the said concerns but the books of account of that concern could not be produced. In respect of Rs. 9,35,275/- appearing in the name of M/s Oriental Leathers, it was as per the report of the ITI, the proprietor of the said concern Shri T.M.Samaiyullah had expired. In this regard, submission of the assessee is as under: "In respect of addition of Rs. 9,35,275/- representing credits appearing in the name of M/s Oriental Leathers, the contents of the relevant portion of the ITI reveal that the Proprietor of the said c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts were made. No attempt was made by the Assessing Officer to find out his business address in the light of adverse report of ITI. The assessee had purchased goods worth Rs. 1,00,48,000/- from M/s Sabari Leather Exports. The Assessing Officer has not made any comments regarding the purchases made by the assessee. The trade creditor is on account of purchase transactions made during the year. The assessee made payments of Rs. 84,50,000/- during the year but surprisingly, the Assessing Officer has not made any comment on the purchases made from this party and regarding payment made by the assessee to this party. The assessee had also made purchases from this party in earlier years. The assessee produced the proprietor of this concern be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thers, the perusals of the relevant portion of the report reveals that one Shri E.K.M.G.Bazeer Ali was present and gave a letter stating that the above party was not known to him. This had lead the ITI to give a report that the credit seemed to be not genuine. Copies of the bills issued by the party to the appellant and bank statement of the appellant wherein the transactions of the appellant with the said party appears are enclosed. The perusal of the above shows that the party is registered under the TNGST and CST Acts. Hence the addition requires deletion. In respect of Victory Tanners, the IT! report reveals that the tannery was closed, that local enquiry revealed that this tannery was closed from 2007, that it could not be verifiable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Registration and also assessment order dated 22.6.2009 of Commercial Tax Department." 10. This addition is also based on ITI's report dated 27.11.2009. The assessee had produced confirmatory letter from M/s Akshaya Leathers along with proof of balance outstanding which were paid by way of crossed cheques. A copy of bank statement of the party was also enclosed. Similar submissions were made regarding M/s Victory Tanners and M/s Sai Leathers. The Assessing Officer did not chose to make further enquiries to verify the details. The assessee had made purchases from M/s Akshaya Leathers to the tune of Rs. 44,03,825/- and payments were made of Rs. 28,79,500/- leaving a credit balance of Rs. 15,24,325/- which was paid in assessment year 2008- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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