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TMI Blog2016 (5) TMI 1257X X X X Extracts X X X X X X X X Extracts X X X X ..... anding balance of creditors - CIT(A) delted the addition - Held that:- Commissioner (Appeals) felt it necessary to conduct enquiry himself and obtain information for enabling him to dispose off the appeal, in our view, no fault can be found with such procedure adopted by the learned Commissioner (Appeals). A reading of the statutory provisions referred to above makes it clear that not only the learned Commissioner (Appeals) is empowered to conduct such enquiry for obtaining information but there is also no need for him to confront the same to the Assessing Officer. Therefore, in our view, the learned Commissioner (Appeals) was not required to obtained a remand report from the Assessing Officer on the basis of information obtained by him under section 133(6) before deciding the issue. Moreover, the learned Commissioner (Appeals) after examining the evidence brought on record having found that the creditors appearing in assessee’s books are genuine there was no logic in again remanding the matter to the Assessing Officer. In the aforesaid facts and circumstances, we do not see any reason to interfere with the order of the learned Commissioner (Appeals) in deleting the addition made u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances of the case and in law, the learned Commissioner (Appeals) erred in deleting the addition of ₹ 8,95,22,222 made on account of unexplained outstanding balances of creditors as assessee had failed to provide the identity, creditworthiness and genuineness of the transaction during the assessment proceedings. 3. On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) failed to appreciate that the details collected by him in respect to sundry creditors should have been remanded to the A.O. for verification as such details were not available to the A.O. during the assessment proceedings. 7. In ground no.1, the Department has challenged the decision of the learned Commissioner (Appeals) in estimating the profit on the sales @ 0.5%. 8. Brief facts are, assessee an individual claimed to be engaged in the business of polished diamonds, rough diamond, precious and semi precious stones, gold and silver. For the assessment year, under consideration, assessee filed his return of income on 30th September 2009, declaring total income of ₹ 1,77,610, which included income from business also. During the assessment proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogically, no addition could have been made at the hands of the assessee. He observed, though, the Assessing Officer inferred that the assessee was actually issuing accommodation bills at the instance of Shri Ashok Jain, but no enquiry was made with Shri Ashok Jain. He observed, if it was found by the Assessing Officer that the assessee was merely a benamidar without any actual business activity how an income can be estimated at the hands of the assessee. However, considering the fact that the assessee had not pleaded before him to tax the income in the hands of Shri Ashok Jain, learned Commissioner (Appeals) proceeded to examine the reasonableness of rate of profit adopted by the Assessing Officer. He observed, assessee in the course of assessment proceedings had furnished various details as under: a. Partywise details of purchase along with their address b. Partywise details of sales along with their address c. Quantitative details of traded goods d. Sample copies of purchase bills e. Comparitative chart of gross profit and net profit f. Audited Balance sheet as on 31/03/2009 10. He noted, the Assessing Officer after verifying the details su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business transaction shown by the assessee is as a name lender of Shri Ashok Jain, and actually no business activity was carried on but only accommodation bills were issued, there is no reason why income should be assessed at the hands of the assessee. He submitted, in any case of the matter, in the preceding assessment years also, assessee s income from business was estimated at a considerably lower rate of 0.03%. In this context, he drew the attention of the Bench to the assessment order passed under section 143(3) for the assessment year 2008 09. He, therefore, submitted there is no reason to interfere with the order of the learned Commissioner (Appeals). 13. We have considered the submissions of the parties and perused the material available on record. As is evident from the facts on record, the Assessing Officer was convinced that the entire business activity of the assessee is as benamidar of Shri Ashok Jain. He has also found, the assessee was providing accommodation bills. In other words, the assessee was not involved in any business transaction. Therefore, logically assessee could not have derived any profit from a non existent business, that too, when it was carried o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner (Appeals). 16. In the course of hearing, the learned Commissioner (Appeals) on verification of material on record, found that though the assessee had produced confirmation letters and other supporting evidences to prove the genuineness of the creditors but the Assessing Officer did not carry out any investigation to verify genuineness of the transactions in spite of the fact the address and other details of creditors were available on record. Therefore to verify the genuineness of the transaction, the learned Commissioner (Appeals) exercising power under section 133(6) of the Act, called upon the creditors to furnish the following information. (i) Your account balance in the books of Ravindra B. Upalekar is pending before the undersigned for adjudication. In the balance sheet of Shri Ravindra B. Upalekar as on 31/03/2009. The nature of transaction done for the period 01/04/2008 to 31/03/2009; (ii) Copy of your ledger account to the mentioned appellant for the same period. (iii) The details of payment received by you in relation to credit amount outstanding; (iv) Your PAN and designation of Assessing Officer (v) Copy of I.T. Acknowledgement / Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnished all evidences including the confirmation letters from the creditors before the Assessing Officer. Only for the reason that the assessee was not able to produce the creditors before him the Assessing Officer had made addition under section 68. Learned Authorised Representative submitted, in the course of proceeding before the learned Commissioner (Appeals), the assessee had not produced even a single piece of fresh evidence. The learned Commissioner (Appeals) after verifying the materials already available on record before the Assessing Officer having felt that further information is required before coming to a just conclusion has issued notices under section 133(6) and obtained necessary information from the creditors and only after evaluating such information brought on record, he has deleted the addition having found that not only the creditors are identifiable but they have also confirmed the transactions by producing their books of account and bank statement. Learned Authorised Representative submitted, as the assessee has not produced any additional evidence there was no necessity on the part of the learned Commissioner (Appeals) to call for a remand report from the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the evidence brought on record, it was clear that the creditors were genuine. Now the grievance of the Department before us is learned Commissioner (Appeals) should not have deleted the addition on the basis of information obtained by him under section 133(6) without calling for a remand report from the Assessing Officer. We do not find merit in the aforesaid contention of the learned Departmental Representative. It is evident on record that the assessee has not furnished any additional evidence before the learned Commissioner (Appeals). The assessee made its submissions before the learned Commissioner (Appeals) only on the basis of documentary evidence already furnished before the Assessing Officer. The learned Commissioner (Appeals) after perusing the evidences brought on record felt it necessary to conduct enquiry himself to ascertain the genuineness of the creditors and accordingly issued notices under section 133(6) of the Act seeking further information on the credit from the concerned creditors. After obtaining necessary information from the creditors, the learned Commissioner (Appeals) examined the same and drew his own conclusion. We do not find any irregularity or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e off the appeal, in our view, no fault can be found with such procedure adopted by the learned Commissioner (Appeals). A reading of the statutory provisions referred to above makes it clear that not only the learned Commissioner (Appeals) is empowered to conduct such enquiry for obtaining information but there is also no need for him to confront the same to the Assessing Officer. Therefore, in our view, the learned Commissioner (Appeals) was not required to obtained a remand report from the Assessing Officer on the basis of information obtained by him under section 133(6) before deciding the issue. Moreover, the learned Commissioner (Appeals) after examining the evidence brought on record having found that the creditors appearing in assessee s books are genuine there was no logic in again remanding the matter to the Assessing Officer. In the aforesaid facts and circumstances, we do not see any reason to interfere with the order of the learned Commissioner (Appeals) in deleting the addition made under section 68 of the Act. Grounds no.2 and 3 are dismissed. 21. In the result, assessee s appeal and cross objection as well as Revenue s appeal are dismissed. Order pronounced in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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