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TMI Blog2014 (11) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... h confirmation letters from the creditors. In response to the query raised by AO, assessee though furnished details of sundry creditors along with confirmation letters, but, he did not furnish the quantity and value of goods supplied by each sundry creditor. After verifying the details, AO noted that assessee has furnished two different confirmations from M/s Agastya Agro Ltd, one of which is for its Hyderabad branch on an amount of Rs. 1,79,85,435.48 and the other one is for Karnataka Branch for an amount of Rs. 80,55,237.83. He further noted that both the confirmation letters were dated 24/02/205 and signed by same person. AO further noted that these two confirmation letters were prepared and signed by MD of the company. On further enquiry, AO found that M/s Agastya Agro Ltd. is assessed in the same range, by ACIT, Circle - 1(1) and in the scrutiny assessment proceeding in case of M/s Agastya Agro Ltd. as per the information submitted, it was found the amount outstanding from M/s Blaze Agritech P. Ltd., i.e. the present assessee was shown at Rs. 80,55,239. Apart from the aforesaid amount, no other amount was found to be in the name of M/s Blaze Agritech P. Ltd. as on 31/03/05. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that the amount due to M/s Sainatheswara Traders, Hyderguda was paid in the subsequent years. In support of such contention, assessee submitted an account copy of M/s Sainatheswara Traders, Hyderguda for the subsequent years. After considering the submissions of assessee, CIT(A) called for a remand report from the AO. AO in his report dated 3/02/10, stated that alleged cheque payments claimed to have been made by assessee to M/s Sainatheswara Traders, Hyderguda, on verification were found to have been paid to one Mr. Manoj Kumar Jain. AO, therefore, commented that as the payments were not made to M/s Sainatheswara Traders, Hyderguda, assessee's claim cannot be accepted. In reply to remand report submitted by AO, it was stated by assessee that the payments were made through crossed-cheques on account of amount due to M/s Sainatheswara Traders, Hyderguda. It was further submitted that as M/s Sainatheswara Traders, Hyderguda has closed its business activity, assessee was not in a position to contact the proprietor of the said concern. It was further submitted in so far as assessee is concerned, it made payments to M/s Sainatheswara Traders, Hyderguda and the payments were enca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, Hyderguda was produced. It was submitted that though assessee claimed that it has purchased goods from M/s Sainatheswara Traders, Hyderguda during the year and also sold goods during the subsequent year, but, he has not been able to substantiate the same with supporting evidence. He submitted that in absence of any corroborative evidence to prove the credit of Rs. 1,79,85,435, the CIT(A) was not justified in deleting the addition made by AO. 6. The learned AR, on the other hand, submitted that before the AO itself assessee has explained that by mistake it has claimed the amount of Rs. 1,79,85,435 to be due to M/s Agastya Agro Ltd, however, subsequently, being aware of the mistake committed, it has submitted before AO that actually the amount was due to M/s Sainatheswara Traders, Hyderguda from whom assessee purchased goods during the relevant PY. It was further submitted that assessee has even sold goods to the said party during the subsequent year. In this context, learned AR referred to the reply submitted before the AO on 26/11/07, a copy of which is placed at page 17 of assessee's paper book. Learned AR submitted that as AO has not treated the purchases as bogus and accepte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to conclusively prove that the credits were relating to M/s Sainatheswara Traders, Hyderguda with whom assessee claimed to have business transactions of purchase and sale of pesticides. However, learned CIT(A) accepted assessee's claim on mere face value without supporting evidence only on the reason that assessee has made payments through crossed-cheques to M/s Sainatheswara Traders, Hyderguda, which proves the fact of transaction being carried out by assessee with that party. While coming to such conclusion though the learned CIT(A) has observed that AO has verified all the cheques and found that except an amount of Rs. 3,78,467 rest of the amount is credited to the account of M/s Sainatheswar Traders, however, on perusal of the remand report dated 03/02/2010 of AO, a copy of which is at page 11 of paper book, we do not find any such observation. In our view, the conclusion drawn by CIT(A) is not correct. It is a fact on record that assessee apart from submitting that it has entered into purchase and sale transaction with M/s Sainatheswara Traders, Hyderguda has failed to produce any corroborative evidence to prove either the existence of M/s Sainatheswara Traders, Hyderguda or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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