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TMI Blog2018 (5) TMI 1382X X X X Extracts X X X X X X X X Extracts X X X X ..... been reversed in the books of account which is supported by PB-64 which is a bill of the same amount of the goods so returned. Assessee, therefore, explained the discrepancy in the account of M/s. Graphite India Ltd. The addition is, therefore, not justified. We, accordingly, set aside the orders of the authorities below and delete the addition Addition u/s 41 - Held that:- Since the amount payable to the sundry creditors was not credited to the assessee’s P&L A/c. for the year and as the amount was still shown as outstanding at the end of the relevant year, the provisions of section 41(1) could not be attracted. Addition of bogus purchases - Held that:- It is well settled that though admission is a good evidence against the maker, but assessee is entitled to disprove the same through explanation and evidence on record. The above facts clearly show that the amount in question does not pertains to assessment year under appeal. Therefore, no addition could be made in assessment year under appeal. We, accordingly, set aside the orders of the authorities below and delete the addition. - ITA.No. 73, 74, & 75, /Del./2015 And ITA.No.71/Del./2015 - - - Dated:- 18-5-2018 - SHRI B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Shri R.N. Aggarwal and Director of the Assessee- Company was also taken. Shri R.P. Aggarwal read over the statement of Shri R.N. Aggarwal and has stated that the contents of the statement given are true and correct. During the course of survey, in respect of the assessee group, there were difference in cash which is also noted at page-2 of the assessment order. Further, the assessee during the course of survey made surrender of various amounts under section 41(1) in other group cases and for assessment year under appeal assessee surrendered amount of ₹ 4.52 crores on account of advance given in the case of the assessee-company. During the course of assessment assessee was asked to reconcile the surrendered amount with the books of account and P L A/c and the assessee submitted that surrender was retracted by them by not paying the tax. The A.O, therefore, considered the case on the basis of the seized material and copy of the seized diary was scanned and reproduced in the assessment order. The A.O. noted that assessee agreed for surrender. The statement of Shri R.N. Aggarwal is also reproduced in the assessment order in which he has surrendered the amount in question i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is issue is relevant in other year, therefore, same is not discussed in detail here. 6.1. The Ld. CIT(A) as regards addition of ₹ 4.52 crores referred to statement of Shri R.N. Aggarwal in which he has surrendered amount in question and accordingly, confirmed the addition. 6.2. As regards addition of ₹ 1,08,003/-, the Ld. CIT(A) similarly noted that assessee failed to explain as to how the entry have been reversed. Therefore, this addition was also confirmed and both the grounds have been dismissed. 7. Learned Counsel for the Assessee submitted that assessee retracted from the statement made during the course of survey because no incriminating material was found against the assessee. He has submitted that the A.O. while passing the assessment order did not go with the surrender made during the course of survey. The A.O. rejected the books of account. Therefore, in the case of Government contractors the profit rate declared by assessee at 8% would be justified. The assessee produced the books of account before A.O. but the A.O. has not given any finding on the same. He has submitted that A.O. may accept the surrender if found valid or A.O. should estimate the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from unaccounted income not reflected in the books of account. The statement of the Director was recorded in which he has surrendered the amount in question for the purpose of taxation. However, later on, assessee retracted from the statement and did not offer the amount for the purpose of taxation. The assessee-company later on made further surrender before A.O. and stated that no unaccounted income is admitted and assessee-company has produced the books of account and audit report. The assessee offered, estimation of income by applying net profit rate of 8% on the turnover subject to no penalty or prosecution. In these circumstances, it is clear that assessee offered explanation at the assessment stage to show that there was no incriminating material found against the assessee. Though the A.O. has reproduced the scanned copy of the seized diary in the assessment order but no findings have been given on the basis of the same as to how much undisclosed income would be estimated on the basis of such diary. The A.O. ultimately held that since books of account have not been produced by assessee, therefore, he is not satisfied about correctness and completeness of the accounts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontradictory order has been passed by the A.O. without reference to the books of account of the assessee and other material, we are of the view that the matter should go back to the A.O. for reconsideration of the entire matter. We, accordingly, set aside the orders of the authorities below on the issue of addition of ₹ 4.52 crores and restore to A.O. for fresh determination. The A.O. shall pass the order afresh in accordance with law by considering the entire evidence on record, books of account to be produced by the assessee along with other details. The A.O. shall give reasonable, sufficient opportunity of being heard to the assessee. Grounds of Appeal Nos. 1 to 4 of the appeal of the assessee are allowed for statistical purposes. 10. On Ground No.5, assessee challenged the addition of ₹ 1,08,003/- The authorities below noted that the difference in the case of Graphite India Ltd., has not been explained. Learned Counsel for the Assessee however, referred to PB-53 which is reconciliation statement of Graphite India Ltd., with their ledger account in which it was explained that damaged goods of the amount in question have been reversed in the books of account which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ress of the creditor Amount 1 Integral Screw 8,35,000 2 Rahul Enterprises 7,12,662 3 Purnaa Eco System 7,00,000 Total 22,47,662 3. I heard the rival submissions and carefully considered the same along with the orders of tax authorities below. The provisions of section 41(1) are implicit clear. Until and unless the liability, in respect of which the assessee has claimed the deduction in the earlier year, got remitted or ceased, no addition can be made in the assessment year. The onus to prove that the trading liability in respect of expenditure or loss, already claimed by the assessee in the earlier year, got remitted or ceased during the impugned assessment year, is on the revenue. 4. I noted that in the impugned case, the revenue has not discharged its onus that the creditors, which have been shown by the assessee got remitted or ceased during the impugned assessment. The assessee has submitted the conformation copy of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee submitted that this issue is same as has been considered in ITA.No.71/Del./2015 for the A.Y. 2008-2009 in the case of M/s. Vichitra Construction Pvt. Ltd. Following the reasons for decision in the case of M/s. Vichitra Construction Pvt. Ltd., (supra), we set aside the orders of the authorities below and delete the addition. 19. In the result, ITA.No.74/Del./2015 of the assessee is allowed. ITA.No.73/Del./2015 Vichitra Prestressed Concrete Udyog Pvt. Ltd., - A.Y. 2008-2009 20. This appeal by assessee has been directed against the order of the Ld. CIT(A)-19, New Delhi, dated 1st October, 2014, for the A.Y. 2008-2009. 21. On ground Nos. 1 to 3, assessee challenged the addition of ₹ 37,90,000/- made by A.O. on account of purchases made from M/s. S.R. Industrial Corporation. The A.O. noted that since the assessee admitted to have arranged bills of ₹ 37,90,000/- from M/s. S.R. Industrial Corporation, the same were disallowed. Ld. CIT(A) following his order for A.Y. 2010-2011 decided this issue against the assessee. 22. Learned Counsel for the Assessee referred to ITA.No.75/Del./2015 in the case of assessee for A.Y. 2010-2011 (supra), in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The above facts clearly show that the amount in question does not pertains to assessment year under appeal. Therefore, no addition could be made in assessment year under appeal. We, accordingly, set aside the orders of the authorities below and delete the addition. In view of the above, there is no need to decide the addition on merit. Ground Nos. 1 to 3 of appeal of assessee are allowed. 25. On ground Nos. 4 and 5, assessee challenged the addition of ₹ 5,24,534/- on account of bogus creditors under section 41(1) of the I.T. Act. The A.O. made the addition on account of bogus creditors and in assessment year under appeal addition made in respect of two creditors i.e., Shri R.K. Gupta of ₹ 4,81,163 and Rahul Enterprises ₹ 43,371/-. The Ld. CIT(A) following the order in the case of the group cases, confirmed the addition. 26. Learned Counsel for the Assessee submitted that this issue is same as have been considered above in ITA.Nos.71 74/Del./2015 (supra). 27. The Ld. D.R. did not dispute this fact. 28. Following the Order of the Tribunal in the case of assessee and other group cases in ITA.No.71 74/Del./2015 (supra), we set aside the orders of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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