9911796707
TMI Blog2016 (4) TMI 635X X X X Extracts X X X X X X X X Extracts X X X X ..... d /undisclosed sources. 3. Facts in brief are that the assessee filed her return of income on 31.10.2007 declaring an income of Rs. 3,96,505/-. The assessee is a proprietor of M/s Millenium Metals and was a engaged in the business of trading in Steels and Metals. The case of the assessee was selected for scrutiny and the notices u/s 142(1) and 143(2) were issued and served upon the assessee. During the course of scrutiny proceedings, the AO found that the assessee had entered into certain transactions which were not confirmed or partly confirmed by those parties and thus made the additions of Rs. 1,40,43,154/- vide 5(a), Rs. 10,00,000/- vide para 5(b) and vide para 5(c) of the assessment order respectively. Aggrieved by the order of the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and record produced before them and the assessment was made on hypothetical basis by the AO and in the same fashion the ld. CIT(A) confirmed the action of the AO. 5. On the ground No.1, the ld. AR submitted that during the year, the assessee received an amount of Rs. 35 lakhs from M/s Sera Organics Pvt Ltd on 24.1.2007 by cheque which was duly confirmed by the parties by a confirmation letter dated 1.4.2007, which is supported by a letter placed at page 13 of the paper book. The ld. AR further submitted that the AO wrongly observed as stated in para 5(a) of the Assessment order that the assessee has advanced Rs. 1,75,43,154/- to Sera Organic Pvt Ltd on various dates which were not accounted for which is totally wrong and against the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tamani Iron and Steel Co.Pvt.Ltd and Rs. 4 lakhs advanced which was not reflected in the bank statement and therefore, he disallowed Rs. 10 lakhs which is also totally wrong and against the facts. Before the AO and the ld. CIT(A), the ld.AR submitted a confirmation letter dated 1.4.2007 confirming Rs. 18 lakhs payable to M/s Chintamani Iron and Steel Co. Pvt. Ltd. The ld. Counsel submitted that during the year, the assessee received an amount of Rs. 8 lakhs on 8.9.2006 and Rs. 14 lakhs on 22.11.2006 by account payee cheques from the above parties and returned Rs. 4 lakhs on 4.11.2006. Thus, net outstanding of the above parties was Rs. 18 lakhs which was confirmed by that party by filing the confirmation , bank statements and copy of ledger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o M/s Jammudeep Metal and Tubes P Ltd was Rs. 26 lakhs which was confirmed by the party in the confirmation letter placed at page 36 of the paper book. The AO also observed that the assessee had advanced Rs. 26 lakhs to M/s Jammudeep Metal and Tubes P Ltd which was not reflected in the confirmation of the said party and at the same time the AO observed that the assessee had received an amount of Rs. 23 lakhs which was reflected in the statement of bank account of the assessee and thus, Rs. 26 lakhs was added as unexplained transaction and undisclosed amount. The ld. Counsel submitted that the assessee had entered into various transaction of borrowings and repaying the advances by account payee cheques to these parties on various dates as is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons were added in the hands of the assessee without without any basis or material and thus, the AO framed the assessment in a hypothetical way putting the assessee to enormous harassment and inconvenience . Similarly, the ld. CIT(A) confirmed the addition without looking into the merits and facts of the cases which are very clear and apparent from the records produced. Therefore, in view of these facts, the additions of Rs. 1,40,43,154/- in Ground No.1, Rs. 10 lakhs in ground no 2 and Rs. 26 lakhs in ground No.3 on account of unexplained/undisclosed income are ordered to be deleted by reversing the order of First Appellate Authority. AO is directed accordingly. 7. In result the appeal of the assessee is allowed. Order pronounced in the op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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