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TMI Blog2016 (7) TMI 1131X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure the addition cannot be made in the hands of the assessee and accordingly we hold that the learned CIT(A) was not justified in confirming the addition on account of these differences in the reconciliation. Accordingly, AO is directed to delete the entire addition. - Decided in favour of assessee. - ITA No. 3430/Del/2013, Cross Objection No. 239/Del/2013 - - - Dated:- 14-6-2016 - SHRI I.C. SUDHIR AND SHRI O.P. KANT For The Assessee : S/Shri Ved Jain Ashish Chadha, Adv. For The Department : Shri Rajiv Malhotra, CIT( DR) ORDER PER I.C. SUDHIR: JUDICIAL MEMBER Revenue has questioned first appellate order on the following grounds of appeal: 1. The order of the Learned CIT(Appeals) is not correct in law and facts. 2. On the facts and in the circumstances of the case, the Learned CIT(Appeals) erred in deleting the addition of ₹ 57,72,733 made by the Assessing Officer on account of unexplained credits wherein the assessee company had taken accommodation entries by paying cash to M/s. Kalra Paper Pvt. Ltd., 3. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in deleting the addition of ₹ 2, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the learned CIT(A). On going through the order of the learned CIT(A) we note that the learned CIT(A) has examined the issue and has recorded a finding which reads as under:- 4.3 I have carefully considered the matter. Any deposit in a bank account has to have some source. In this case, it is undisputed that the source of deposits in the bank accounts of the appellant is cheques given by M/s Kalra Papers (P) Ltd. While the revenue claims, on the basis of documents impounded during survey u/s 133A from the premises of M/s Kalra Papers (P) Ltd. that these cheques were given against cash received from the appellant, the appellant claims that it did not have any cash transactions with M/s Kalra Papers (P) Ltd. The version of M/s Kalra Papers (P) Ltd. is not on record. It is not known whether any statement of the director / employee of M/s Kalra Papers (P) Ltd. was recorded and what were its contents. Evidence found in the possession of a person is good evidence against that person, and unless that person claims to the contrary, or corroborative evidence is found to indicate contrary facts, that evidence cannot be used against a third party. This rule of evidence was laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheques have been accounted for against sales made by the assessee company. The sales having been included in the income, the same addition cannot be made again in the hands of the assessee company. 8. It may also be relevant to refer to the order passed by the ITAT in the assessee s own case in the preceding assessment year in ITA No. 1971- 1972/Del/2013 dated 30.03.2016, wherein under similar circumstances the additions made by the learned AO were deleted. The said additions were deleted following the order in the case of its sister concern, Northern Strips Ltd., where the appeal filed by the Revenue against such order stands also rejected by the Hon ble jurisdictional High Court of Delhi vide its order dated 1st August, 2015. In view of the above facts this ground of the Revenue is rejected. 9. The next ground in appeal is deletion of addition of ₹ 2,65,577/- made by the AO on account of the credit card expenses. The AO has made this addition on the ground that the director of the company has incurred this expenditure through credit card. Since these expenses incurred by the director were through credit card, the same cannot be considered as business expenditure and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reconciliation of the account for the 7 years were made and as per this reconciliation, the learned CIT(A) worked out a table whereby the differences for each year were worked out. As per this table there were some short purchases booked by the assessee company whereby in some of the years there were excess purchases. The learned CIT(A) on the basis of this reconciliation sustained the addition to the extent of the differences in each of the year. In this year there was a short purchase of ₹ 122,985/- and accordingly the learned CIT(A) sustained addition to the extent of ₹ 1,22,985/- as against addition of ₹ 10,35,790/- made by the AO. It was submitted by the learned AR that the learned CIT(A) was not justified in sustaining this addition. It was submitted that the assessee has been making regular purchases from M/s Jindal Poly Films Ltd. Against these purchases the assessee is entitled to discounts and rebates and number of debit and credit notes are passed during the year. It was submitted that it is not the case where there is any excess quantity or bill which has not been accounted for. It is a case where difference has arisen because of the claims and count ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20,979 2006-07 1,644,915,799 85,997,685 1,730,913,484 1,734,993,646 4,080,162 4,105,324 2007-08 1,673,203,226 73,088,544 1,746,291,770 1,751,585,291 5,293,521 5,293,521 2008-09 2,245,307,214 118,925,357 2,364,232,571 2,364,355,556 122,985 1,158,745 16. On going through the above table it is evident that the differences are arising mainly on account of the discounts. In some of the years discount claimed by the assessee is more. Consequently the purchases claimed by the assessee are less as compared to the sales shown by Jindal Poly Films Ltd. In some of the years the purchase shown by the assessee are little higher as compared to the sales shown by Jindal Poly Films Ltd. As rightly explained by the learned AR that these differences were arising because of the credit notes and debit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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