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TMI Blog2019 (7) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... n made under the head Current Liabilities by the Ld. AO has been rightly deleted by ld CIT(A). In the instant case, AO could not bring on record any conclusive evidence, except hazarding the observation that the assessee was unable to provide the statement of the secured loan transactions to bring in the charge of undisclosed investment. Assessee has named the credit institutions where from he received such loans to stand testimony to their irrefutable and impeccable character. Conclusion reached by AO was based on subjective perceptions of surmise and conjecture and the findings rendered therein and were not in consonance with the facts and CIT(A) acted aptly by considering appropriate factors absolutely germane to the issue in applying the settled parameter by deleting the impugned addition. That being so, we decline to interfere the order passed by the learned CIT(A), hence, his order on this issue is hereby upheld and the grounds of appeal raised by the Revenue is dismissed. Addition based on estimating the net profit @ 1% - HELD THAT:- Respectfully following the judgment of the Coordinate Bench in the assessee`s own case for AY 2008-09, we direct the Id. AO to det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de the impugned addition based on preponderance of probability'. In this regard the relevant extract of the assessment order containing the reasons of the AO for making the above addition is reproduced below: In the balance sheet of SM Enterprise the assessee's current liabilities provisions has been shown at ₹ 1,70,73,828. On being asked the A/R of the assessee stated that this represents sundry creditor but however failed to furnish the details. The A/R even failed to furnish the details of purchase made from or payments made to the said sundry creditors. [order sheet noting dated 16.12.2010. It is an amazing to note the assessee who claimed to have made purchases on credit and madeS subsequently payment does not have any details, the basic ingredients of any sundry creditor is missing. Obvious question arises then on payments were made - in absence of details no reply can come forward. Any person shall have his own record for making payment to someone, not to speak of ₹ 1.7 crore around - whether books of accounts are maintained or otherwise. The assessee failed to discharge his onus to prove that the sundry credito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not produced the current liabilities and provisions [sundry creditor] of the appellant cannot transform into the own investment of the appellant. In my opinion non submission of details is not sufficient enough to tilt the scale of Preponderance of Probability against the appellant and in favour of the AO. The AO was required to take more affirmative action to substantiate his claim. 4.4. In view thereof I am of the opinion that the addition of sundry creditors as income of the appellant is not justified and accordingly the addition of ₹ 1,70,73,828/- is hereby DELETED. The ld CIT(A) also deleted the addition of ₹ 11,00,772/- on account of unexplained loan. 7. Aggrieved by the order of the CIT(A), the Revenue is in appeal before us. The learned DR for the Revenue has primarily reiterated the stand taken by the AO which we have already noted in our earlier para and is not being repeated for the sake of brevity. On the other hand, the learned counsel for the assessee reiterated the submissions made before the authorities below. 8. We have heard both the parties and perused the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted fact that the bifurcation of such outstanding liabilities was provided in Schedule F of the audited accounts filed before the Ld. Assessing Officer. It was also explained that there was a debtor amount of ₹ 2,46,51,199/- which is outstanding on this account and is the source of this liability. It is not in dispute that in the instant case, the ledger accounts on these accounts were provided to the Ld. Assessing Officer, however, the Ld. Assessing Officer had brush aside such ledger account on the ground the entire books could not be produced during the course of assessment proceedings. The provisions of section 69 of the Income Tax Act, 1961 are attracted where the Assessing Authority finds that an investment is unrecorded in the books and the taxpayer offers no explanation as to the nature and source thereof or the explanation offered is not satisfactory in his opinion then the value of such investment may be deemed to be the income of the taxpayer for the corresponding assessment year. In other words, the provision is attracted in case of an investment which is unrecorded in the books of accounts. 9. We note that in the instant case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on account of labour and truck owners and were paid subsequently. As the said sum of ₹ 1,70,73,828/- was a mere outstanding amount against purchase and hence, provisions of section 69 of the Act do not come into play, inasmuch as the purchase recorded in the accounts were not disputed. The amounts outstanding were shown in the balance sheet as 'Current Liabilities' as on 31-03-2009. Therefore, the said amount did not form part of the capital of the assessee. Where the Tribunal had recorded a categorical finding based on appreciation of materials and evidence on record that the amounts appearing as deposits in the books represented purchases made by the assessee on credit and, therefore, the provisions of section 68 could not be attracted in the instant case [C.I.T. -VSPANCHAM DASS JAIN (2006) 156 TAXMAN 507 (ALL)]. Further, where Assessing Officer had drawn an adverse conclusion only on account of nonverifiability of Current Liabilities but there being no dispute as regards purchases, and trading results having been accepted, addition made under section 68 was not sustainable [LT.O. -VS- ZAZSONS EXPORTS LTD. (2015) 153 ITD 1 (LUCK) (TM)]. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition made in the present context in the sum of ₹ 1,70,73,828/- has no legs to stand upon. That being so, we decline to interfere with the order of Id. C.I T.(A) deleting the aforesaid addition. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed. 11. We note that assessee had received secured loans from Himmatsingha Auto Finance wherein the outstanding balance in the sum of ₹ 11,00,772/- was disclosed in its balance sheet as on 31-03-2009. It was the case of the Ld. Assessing Officer that since the assessee has allegedly failed to submit the statements in respect of such lender, the outstanding balances disclosed in the Balance Sheet as on 31-03-2009 were added as undisclosed investment. There is no doubt or dispute that the creditor in this case is a credit institution and the genuineness of the transactions undertaken with them through the banking, channel is beyond any shadow of doubt. However, the Ld. Assessing Officer disbelieved such genuine transaction on the ground that the assessee failed to prove the genuineness of transactions. The statute had empowered the Assessing Authority with d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on filed by the assessee which relates to addition based on estimating the net profit @ 1% to the tune of ₹ 8,41,663/- 13. We have heard both the parties and perused the material available on record, we note that ld CIT(A) has passed the order estimating the net profit @ 1% to the tune of ₹ 8,41,663/- The appellant had admitted a turnover of ₹ 21,71,66,250/- on which he admitted net profit of ₹ 13,30,000. The net profit rate of the appellant works out to 0.61%. The AO opined that the net profit rate admitted by the appellant was low and therefore he enhanced the net profit rate of the appellant to 1.00%. Thus, the net profit of the appellant was increased to ₹ 21,71,663 and the difference of ₹ 8,41,663 was added back by the AO to the income of the appellant. Before us, the learned DR for the Revenue has primarily reiterated the stand taken by the AO which we have already noted in our earlier para and is not being repeated for the sake of brevity. On the other hand, the learned counsel for the assessee reiterated the submissions made before the authorities below. 14. We note t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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