9911796707
TMI Blog2014 (12) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... . Kay Dee Traders that these payments were received by them on behalf of Sandeep Aggarwal & Sons (HUF) - On the contrary, he did not consider the documentary evidence in the possession of assessee - section 28(iv) read with section 41(1) as applied by Ld. CIT(A) are not applicable to the assessee as there is sufficient evidence of making the payments against credit balance - CIT(A) has wrongly upheld the addition – Decided in favour of assessee. - I.T.A. No. 33 /Del/2011, I.T.A. No. 5546/Del/2010 - - - Dated:- 21-11-2014 - Shri I. C. Sudhir And Shri T. S. Kapoor,JJ. For the Appellant : Shri C. S. Agarwal, Sr. Adv. For the Respondent : Shri BRR Kumar, Sr. DR ORDER Per T. S. Kapoor, AM: These are cross appeals filed by the assessee as well as by Revenue against the order of Ld. CIT(A) dated 27.09.2010. The grounds of appeal taken by assessee as well as by Revenue are as under: I.T.A.No. 33/Del/2011: 1. That the learned CIT(A) has erred both on facts and in law in confirming the order of assessment sustaining the addition made by ₹ 54,39,223/- representing the value of purchases made on credit. 2. That the CITCA) has failed to appreciate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the action of CIT(A) by which he had deleted disallowance of ₹ 10,87,844 made by A.O. u/s 40A(3) of the Act. 4. Brief facts of the case are that the assessee filed his return of income as HUF and the case of the assessee was selected for scrutiny. During assessment proceedings, the A.O. observed that the assessee had reflected in his balance sheet a credit balance of ₹ 54,39,222/- in faovure of M/s. Kay Dee Traders which was on accounts of credit purchases made from it. Therefore, the A.O. issued notice u/s 133(6) to M/s. Kay Dee Traders, Muzaffarnagar to confirm the credit balance of ₹ 54,39,222/- which was appearing in the books of account of the assessee. M/s. Kay Dee Traders intimated that there is no such debit in its books of accounts and therefore, the A.O. wrote a letter to ITO, Ward 2(3), Muzaffarnagar having jurisdiction on M/s. Kay Dee Traders who also informed that there was no debit in the name of Suresh Chand Agarwal in the balance sheet of the assessee namely M/s. Kay Dee Traders. In support, the A.O. also sent a copy of the audit report filed by M/s. Kay Dee Traders, Musaffarnagar. The A.O. further observed that cash book of M/s. Kay Dee Tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,30,450/- Addition as discussed above 54,39,222/- Total Income 56,69,672/- Assessed accordingly. Charge interest u/s 234A, 234B, 234C 2340 of the I.T. Act. Issue D/N Challan. Penalty notice under section 271(1)(c) is being is being issued separately. 5. Aggrieved the assessee filed appeal before Ld. CIT(A). Ld. CIT(A) deleted addition on account of violation of provisions of Section 40A(3) but he upheld the addition of ₹ 54,39,222/- which he confirmed by holding as under: The facts of the case and submissions made by the appellant have been carefully considered. It is observed that the issue under dispute is that as per the appellant the payments against purchases were not made to Kay Dee Traders during the year but were made subsequently through cheques at Rs~19,00,000/- and ₹ 27,00,000/- in the month of March, 2009. On the other and M/s Kay Dee Traders has stated that it had received the payment the relevant period therefore the appellant was not its debtor. The remand report of the A.O. is of crucial importance who had examined the books of M/s Kay Dee Traders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave made cash payments in respect of purchases. to receive the amounts from another It would be justified if the addition is made u/s 28(iv) read with section 41(1) of the Act. Lastly, regarding the afterthought story of making payments of ₹ 46 lac in March, 2009, there is nothing unusual on the part of M/s. Kay Dee Traders to accept payments from the appellant on behalf of its family concern since such practice has been admitted in appellant s case when Mr. Amit Agrawal has received payments on behalf of other two parties. Therefore, the appellant's contentions are not acceptable from an angle. It would be justified if the addition is made u/s 28(iv) read with section 41 (1) of the Act. Interestingly, the appellant of its own has referred to the decision of Hon'ble Gujarat High Court in the case of CIT vs. Chetan Chemical (P) Ltd.(2004) 188 CTR 572 in its submissions. However, this decision is not applicable in appellant's case as purchases are debited in Trading Account and therefore, the liability in respect of purchases are covered U/S 28(iv) read with section 41 (1) of the LT. Act. However, in the quoted case, the unsecured loans, not being the items of tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laced. Our attention was also invited to paper book page 38 where a copy of bank certificate certifying that two payments were made by the assessee to M/s. Kay Dee Traders was placed. It was further submitted that addition was made on the basis of statement of another person which was recorded at the back of the assessee and, therefore, addition was not sustainable. Inviting our attention to paper book page 93 where a copy of account of M/s. Kay Dee Traders New Delhi acknowledged by it was placed and in view of the statement, it was submitted that the authorities below without indicating anything wrong with the genuineness of this confirmation has made the addition. Continuing his arguments, Ld. Sr. Counsel submitted that finding of Ld. CIT(A) that payment of ₹ 46 lacs was received by M/s. Kay Dee Traders were on account of supply made to M/s. Sandeep Agarwal (HUF) is misplaced as no purchases were made by this firm. The Sr. Counsel submitted that the A.O. had made addition u/s 69 whereas Ld. CIT(A) had confirmed the addition u/s 28(iv) read with section 41(1) of the Act which implies that Ld. CIT(A) was not satisfied with the assessment order to the extent of addition u/s 69 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebited. Therefore there is no doubt about the fact that cheques were issued by the assessee were debited to its bank account and further the cheques were credited in the account of M/s. Kay Dee Traders. The documentary evidence placed by the assessee in the form of bank statement and bank certificate was communicated to Ld. CIT(A) also in the form of rejoinder to remand report. Ld. CIT(A) has reproduced the remand report and rejoinder to remand report which finds place in the order of Ld. CIT(A) at pages 3,4 and 5. At Page 5 of Ld. CIT(A) s order he himself has noted as under: Each allegations of the A.O. and M/s. Kay Dee Traders are against the documentary evidences on record and in possession of assessee and are relied hereunder: that the assessee had made purchases form M/s. Kay Dee Trades on credit as is evident form invoices issued by creditors and copies enclosed as annexure B-1 to B-12 as above and the assessee had made payments to the creditor in the financial year 2008-09 as is evident from the copy of bank account and certificate issued by the bank enclosed as annexure C and D above. 11. The above submissions of the assessee in his rejoinder report has not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
