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TMI Blog2015 (11) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition of R.3,34,56,223/- to the income returned by the appellant and the ld. CIT(A) did not justify in sustaining the same to the extent of Rs. 3,10,40,816/-. The appellant appeals for deletion of the sustained addition of Rs. 3,10,40,816/-. 3. That without any prejudice to the aforesaid ground of appeal, the appellant appeals that without appreciating the facts of the case in correct perspective, the ld. CIT(A) applied the provisions of s.68 of the I.T. Act, 1961 to the appellant's case and thereby sustained the addition to the extent of Rs. 3,10,40,816/- and, therefore, the addition so sustained is bad in law. The appellant appeals for deletion of the sustained addition of Rs. 3,10,40,816/-. 4. That without any prejudice to the aforesaid grounds of appeal, the appellant appeals that on the facts and in the circumstances of the case, the ld. AO grossly erred in applying the provisions of s.69C of the I.T. Act to the appellant's case. In the present case, purchases of goods were made on credit and payments for the same were made by cheques. The amounts remaining payable as on 31/03/07 to the creditors for such goods were assessed u/s 69C. The appellant appeals that the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO failed to appreciate the facts that the purchases were supported by purchase bills (termed as tax invoices) each of which was bearing VAT (value added tax) registration no. & date of registration and also showing the fact that VAT @ 4% of the amount of goods was charged therein. Further the ld. AO failed to appreciate the fact that payments for such purchases were made by cheques partly in the year under consideration and remaining in subsequent year/s (the last of the payments was made on 07/02/2009) (c) that undisputedly facts were that there was no opening stock of goods and that during the year under consideration, there were sales of goods of Rs. 4,46,60,565.88. In view of these facts, it goes without saying that in order to effect such sales, there had to be purchases of goods during the year under consideration, there were purchases of goods of Rs. 4,50,40,750.37 which included the purchases made from the aforesaid parties (creditors for goods). Further, the audited trading a/c and the books of a/cs showed purchases of Rs. 4,50,40,750.37. In view of these facts coupled with the facts stated in sub-para nos.(a) and (b) hereinabove, the ld. AO didn't have any valid reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on 31.03.2007 were added to the total income of the assessee by treating them as a fake liability. 4. Aggrieved assessee went in appeal before the CIT(A) and submitted details of ledger accounts with addresses of all the 11 parties. However CIT(A) gave relief to the assessee to the extent of Rs. 24,15,407/- relating to credit balance appearing in the name of one of the 11 parties named as M/s. K.S.B. Enterprise and sustained the remaining addition of Rs. 3,10,40,816/- made by the Assessing Officer. 5. Aggrieved assessee is now in appeal before the Tribunal. However, Revenue has not filed any Cross Objection against the relief given by the CIT(A). 5.1 Ld. A.R. has filed detailed submissions with supporting evidences in his paper book on 17.08.2015. Ld. A.R. also submitted that Assessing Officer has made the addition by invoking Section 69C of the Act on account of unexplained expenditure whereas ld. CIT(A) sustained the addition by invoking Section 68 by treating the unexplained sundry creditors as unexplained credits. Ld. CIT(A) has held in his order that provisions of Section 69C of the Act are not applicable in this case because Section 69C covers expenses not recorded in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases of Rs. 18,56,599/- were from three other parties [not appearing in the list mentioned (supra)] were paid during the year and out of the remaining purchase amount i.e. 4,31,84,151/- (total purchase Rs. 4,50,40,750/- - Rs. 18,56,599/-), the unpaid sundry creditors remaining at the end of the year was Rs. 3,34,56,223/-, which means that Rs. 97,27,928/- (Rs.4,31,84,151/- - Rs. 3,34,56,223/-) was paid by the assessee through banking channel to the alleged sundry creditors in total. 6.3 Further, from the perusal of assessment order, it is clear that Assessing Officer has allowed purchases to the tune of Rs. 1,15,84,527/-, which were paid to various parties from whom assessee made purchases during the year. After the payment of Rs. 1,15,84,527/- outstanding balance remained to be paid on 31st March, 2007, which means that Assessing Officer has treated all these parties as genuine suppliers to whom some payments have been made during the year. If in any case, Assessing Officer had come to a conclusion that certain supplier is a bogus party, then the complete purchases made from such bogus suppliers should have been disallowed by him. In the present case, Assessing Officer has a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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