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TMI Blog2019 (11) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... do so in view of the decision in the case of Yadu Hari Dalmia vs. CIT [ 1980 (5) TMI 22 - DELHI HIGH COURT] . The unpaid purchase price could not be added to the income of the assessee as per the decision case of CIT vs. Ritu Anurag Aggarwal [ 2009 (7) TMI 1247 - DELHI HIGH COURT] . We are of the view that when purchases were not doubted by the AO, the addition in dispute u/s. 68 is not tenable. As per the aforesaid decision, in the present case AO had not disallowed the purchases from those creditors and trading result were also not disturbed. To support our aforesaid view, we draw support from the decision in the case of Pr. CIT vs. Kulwinder Singh [ 2017 (7) TMI 957 - PUNJAB AND HARYANA HIGH COURT] wherein it has been held that section 68 could not be invoked for the amount representing purchases made on credit. - Decided in favour of assessee. - ITA NO. 3519/DEL/2005, ITA NO. 4805/DEL/2007 - - - Dated:- 15-10-2019 - Shri H.S. Sidhu, Judicial Member And Shri O.P. Kant, Accountant Member For the Assessee : Sh. Vivek Bansal, Adv. For the Department : Sh. Surender Pal, Sr. DR. ORDER PER H.S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income Tax Act, 1961 (In short Act ) at the returned income. Subsequently, the case of the assessee was selected for scrutiny and AO issued notice u/s. 143(2) of the I.T. Act dated 28.10.2012 and served upon the assessee company. Notices u/s. 143(2)/142(1) of the Act were issued to the assessee company. In response to the same, the AR of the assessee appeared from time to time and filed the necessary evidences for substantiating the claim of the assessee. During the year under consideration, the assessee company was engaged in the business of construction of properties. The company was also doing sale and purchase of properties. From the perusal of the Profit and Loss Account for the year consideration, AO was of the view that Assessee has shown expenditure of ₹ 51,59,170/- on account of construction of expenses and in its balance sheet as shown ₹ 21,26,190/- as construction expenses payable. To verify the same, the AO has written a letter to 03 parties i.e. M/s Capricorn Marbles (P) Ltd.; M/s Kay Dee Enterprises and M/s Sanjay Building Material Suppliers. AO issued notices to these 03 parties u/s. 133(6) of the Act on 14.01.2004 requiring them to furnish the inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal. 3. At the time of hearing Ld. Counsel for the assessee stated that assessee is a builder engaged in the business of construction and filed its return on 29-10-2001 declaring the income of ₹ 15,993/- after claiming brought forward losses in respect of A. Y. 1998-99 and 2000-0I amounting to ₹ 4,1901/-, ₹ 8,2901- ₹ 3,513/-. He further submitted that AO has completed the assessment u/s 144 of the Act vide order dated 19-03-2004. He further submitted that Assessee is required to explain about the current liabilities totaling to ₹ 21,26,190/- from the 03 companies for which the AO has issued notices to 03 parties mentioned in the facts of the case u/s. 133(6) of the Act and could not find response from those parties and in this manner the AO added the same amount as unexplained cash credit under the provisions of Section 68 of the I.T. Act. Ld. CIT(A) has also upheld the decision of the AO on the issue in dispute. For substantiating the claim of the assessee, Ld. Counsel for the assesee stated that the addition u/s. 68 of the Act could not be invoked to make the disallowance and for this propose the assessee also relied upon several ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee on the basis of the wrong facts and law. Therefore, the addition in dispute is liable to be cancelled and appeal filed by the Asessee should be accepted. As regard the levy of penalty, Ld. Counsel for the assessee stated that penalty is depending upon the decision of the quantum addition dealt in ITA No. 3519/Del/2005, if this Bench deleted the quantum addition in dispute by respectfully following the various Hon ble High Courts, then the penalty in dispute may also be cancelled. 4. On the contrary, Ld. DR relied upon the orders of the authorities below and stated that the revenue authorities has passed a well reasoned order on the issue in dispute, because assessee could not produce any documentary evidence for substantiating the claim of the assessee. Therefore, the addition has rightly been upheld by the Ld. CIT(A, which does not need any interference and accordingly, request that the quantum appeal of the assesssee may be dismissed. 5. We have heard both the parties and perused the records, especially the impugned order of the Ld. CIT(A) and the case laws cited before us. We find that assessee is a builder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee as per the decision of the Hon ble Delhi High Court in the case of CIT vs. Ritu Anurag Aggarwal (2010) 2 taxmann.com 134 (Delhi). We are of the view that when purchases were not doubted by the AO, the addition in dispute u/s. 68 of the Act is not tenable. As per the aforesaid decision, in the present case AO had not disallowed the purchases from those creditors and trading result were also not disturbed. To support our aforesaid view, we draw support from the decision of the Hon ble Punjab Haryana High Court in the case of Pr. CIT vs. Kulwinder Singh (2017) 298 CTR 389 (Punjab Haryana) wherein it has been held that section 68 of the Act could not be invoked for the amount representing purchases made on credit. 5.1 Keeping in view of the facts and circumstances of the case and respectfully following the precedents as aforesaid, we delete the addition sustained by the Ld. CIT(A) amounting to ₹ 21,26,190/- and allow the ground raised by the Assessee. In the result, this appeal is allowed. ITA No. 4805/Del/2007 (AY 2001-02) 6. Since we have already allowed the issue in dispute raised in the quantum appeal, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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