9911796707
TMI Blog2016 (11) TMI 1295X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee per its appeal are as under:- "1) That the Ld. Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs. 78,45,882, made by the Assessing Officer in the order passed under section 263/144 of the Act, which sum represented balances of Sundry Creditors as on 31st March, 2006 and which was not the subject matter of directions issued by the Commissioner of Income Tax while passing order under section 263 of the Income Tax Act, 1961. 2) That the ultimate decisions of Ld. Commissioner of Income Tax (Appeals) in dismissing the additional ground of appeal relating to aforesaid addition of Rs. 78,45,882 is contrary to his own decision of admitting the same in first and second para of (a) at page 9 of the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice u/s 263 of the Act the assessee submitted that the aforesaid figure of Rs. 1,76,46,882/- consists of two transactions head i.e. advance for the booking of the flats of Rs. 98.01 lacs and Sundry creditors of Rs. 78,45,882/-. The assessee further pleaded that the above figures with necessary details were submitted at the time of assessment. However at the relevant time of proceedings u/s 263 of the Act no body appeared from the side of the assessee and accordingly the ld. CIT under section 263 of the Act held the order of the AO erroneous and prejudicial to the interest of Revenue. The ld. CIT under section 263 of the Act directed to pass a fresh assessment order with the following directions : "(a)---- (b) The issue regarding the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sum of Rs. 1,76,46,882/- comprises (a) Booking Advance of Rs. 98,01,000/- and (b) Sundry Creditor of Rs. 78,45,882/-. In para 5 the CIT details that the assessee was directed on 01.11.2010 to submit ledger copies of advance against Flat and of Sundry Creditor of Rs. 1,00,000/- and above. In para 6 the CIT details the subsequent non-compliance by the assessee. In Para 7 the CIT categorically notes that the assessee had not submitted the requuired details and has not substantiated the explanation furnished. The CIT is clear terms notes further that the AO has not verified the issues stated at clause (a) to (c) of paragraph (1) of his order during the course of assessment proceedings. The CIT accordingly set aside the assessment and direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has shown both the figures of advance for the flats and sundry creditors under the head 'booking advance of flats and sundry creditors'. Therefore in our considered, it is not appropriate to draw the conclusion that only the ld. CIT(A) directed to verify the advances for the flats only and not sundry creditors. It is also important to note that the assessee has not been co-operative at the time of impugned proceedings u/s 263 and 144 of the Act. Considering the fact and circumstances of the case, we uphold the order of Ld. CIT(A) and this ground of assessee is dismissed. 6. The second inter-connected issue raised by the assessee in ground no. 2 & 3 in this appeal is that ld. CIT(A) erred in confirming the order of the AO by susta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l filed by the assessee. Further, the purpose of verifying sundry creditor is to examine not only their identity and genuineness of the transactions but also their capacity to supply the goods. These verification are not possible to be done by only a cursory examination of bank account. The assessee has not produced any bill, ledger account or other challan/receipts to prove the genuineness of the sundry creditors. It is well known that narration in the bank statement cannot be equated with proof of genuineness of creditors. The assessee has not filed the Income tax particulars of the parties also. The same situation was there at the time of order u/s. 263 of the Act. The history of non-compliance before the AO, the CIT-XVII and the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cannot ignore the fact that the assessee has shown its income from the business of civil construction which has been accepted and the assessee cannot generate the income without incurring the expenses on the material. Therefore, once the income has been accepted then its corresponding expenses should also be accepted by the lower authorities. As the material supplier are not responding in terms of the notice issued u/s 131 of the Act, the assessee should not be punished for the same. In view of above and in the interest of the justice & fair play, we are inclined to give one more opportunity to the assessee to justify the amount of creditors. Hence we restore back to the file of AO for deciding the addition afresh in the light of observat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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