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TMI Blog2018 (2) TMI 1710X X X X Extracts X X X X X X X X Extracts X X X X ..... lownace - Held that:- Since the assessee is a proprietorship concern, the element of personal use of telephone and vehicle cannot be ruled out. But we find that the disallowances made by the Assessing Officer are on higher side and the disallowance restricted by the ld. CIT(A) to the extent mentioned above are quite reasonable and, therefore, we find no infirmity in the order of the ld. CIT(A) in restricting the disallowances to the extent mentioned. Revenue appeal dismissed. - ITA No.659/LKW/2016 - - - Dated:- 26-2-2018 - SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY,JUDICIAL MEMBER For The Appellant : Shri Yashvendra Singh, D.R. For The Respondent : Shri Ashok Seth, FCA ORDER PER PARTHA SARATHI CHAUDHURY, J.M: This appeal is preferred by the Revenue against the order of the ld. CIT(A)-II, Lucknow dated 27/9/2016. 2. The grievance of the Revenue are on two counts. First against the deletion of addition of ₹ 1,39,84,675/- on account of sundry creditors and the second is against restricting the disallowances of expenses claimed by the assessee under various heads. 3. The facts in this case are that for assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Agarwal reported in 229 Taxman 532. The assessee also placed reliance upon the decision in the case of Commissioner of Income tax vs. Shiv Dhooti Pearls Investment Ltd. 237 Taxman 104 and contended that as per Section 106 of the Evidence Act, assessee has to prove the source of income and has no burden to prove the source over the source. This was ruled by the Hon'ble Bombay High Court in the case of Deloitte Consulting India Pvt. Ltd. vs. ACIT and Others reported in 351 ITR 160. 6. The ld. CIT(A) after examining the assessment order and the submissions of the assessee, held as under:- 4(4) I have examined the facts and circumstances of the case. I have considered the findings of the Assessing Officer and the submissions of the appellant. I find that the AO has made the impugned addition of ₹ 1,39,84,675/- solely on the ground that the notice issued under section 133(6) of the Act was received back unserved with postal remark. The AO issued notices under section 133(6) of the Act to 5 parties out of which confirmations were not received from M/S C S Electric Limited (credit balance of ₹ 8,35,096/-) and M/S Larsen Toubro Limited (credit balance of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all transactions of payments are through banking channels. No adverse inference is drawn by the AO. When the purchase and sales have not been doubted by the AO, there is no justification in adding the sundry creditors as unverified. 4(6) Similar issue had come up before the Hon'ble ITAT, Allahabad bench in the case of Joint Commissioner of Income Tax vs. Mathura Prasad Ashok Kumar 101 TTJ 0810 (ALL). In this case the appellant was engaged in the business of Banarsi Sarees. They also purchase sarees from local Karigars on credit and sold it customers. Similar addition on account of sundry creditors was deleted in the 1st Appeal and when the revenue went up to Tribunal against the order of CIT, The Hon'ble Bench of ITAT at Allahabad has upheld the order of CIT by holding that AO has treated the liability to be of 'cash credit' in nature and that is why he felt anxious to have the identities of the creditors established. In this respect, first of all, we hold that credits 'in the Sundry Creditors (Udhar Khareed Khata)' are referable to the purchases of sarees on cash basis. As the purchases have been held to be genuine and accepted as such, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has also not been doubted which is evident from para 2 of the assessment order and the Assessing Officer has given a specific finding to that effect. That finding of the Assessing Officer clearly reveals that purchases and sales are verified and the trading results of the assessee have been accepted. The sundry creditors are a result of purchases and sales and payments for purchases, for which no adverse inference has been drawn by the Assessing Officer as regards correctness and completeness of the books of account which means that the books of account of the assessee have been accepted as correct and complete. The Department has also verified from the copy of accounts of M/s Larsen Toubro Limited that the balance is on account of purchases and all the transactions of payments were made through banking channel. The reliance in this regard may be placed on the order of the Allahabad Bench of the Tribunal in the case of JCIT vs. Mathura Prasad Ashok Kumar, 201 TTJ 810 wherein it was observed that as the genuineness of such purchases has not been disputed, rather the same has been accepted, the credits stand fully explained and no adverse inference is called for either on facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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