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TMI Blog2019 (5) TMI 1696X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned, it is specifically explained by Chaudhary Iron Traders that the figures of debtors are deducted from creditors and accordingly, debtors not reflected separately in the ITR which has otherwise been confirmed by the AO with the bank account. Moreover, ledger account of Chaudhary Iron Traders, available at page 103 of the paper book, shows that all the purchases have been made through banking channel. Moreover, when purchases and sales have not been doubted by the AO/CIT(A) which are through banking channel then how the trade creditors can be doubted who have otherwise been accepted during subsequent years. When books of account have been produced by the assessee during the penalty proceedings, the adverse view cannot be taken by the AO for not producing the books of account. Merely because of the fact that creditors have failed to attend the remand proceedings in person, the addition is otherwise not sustainable. So, we are of the considered view that addition made by the AO and confirmed by the ld. CIT (A) on account of trade creditors is not sustainable. So, AO is directed to delete the same after duly verifying the documents already brought on record by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudication of the controversy at hand are : assessee being an individual taxpayer filed return of income at the income of ₹ 3,56,480/-, who is engaged in the trading of iron and steel in the name and style of M/s. Allien Enterprises. Balance sheet of the assessee tallies at ₹ 88,28,373.67 as on 31.03.2009 showing capital amount of assessee tallies at ₹ 15,61,682.14. On the turnover of ₹ 1,56,63,302/-, assessee has disclosed gross profit and net profit of ₹ 9,51,196/- ₹ 3,56,480/- @ 6.07% 2.28% respectively.. Books of account have not been produced by the assessee. 3. AO noticed that the assessee has deposited cash of ₹ 20,17,338/- in his saving bank account for FY 2008-09 on different dates. On failure of the assessee to put forth the explanation, the nature and source of transaction nor the said saving bank has been shown by the assessee in the balance sheet nor in the return of income filed for AY 2009-10, AO treated the same as unexplained cash credit and made addition thereof to the total income of the assessee. 4. AO also noticed that the assessee has shown creditors of ₹ 45,69,338/- as on 31. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO. It is also not in dispute that after accepting the remand report, the ld. CIT (A) has accepted the contention of the assessee that addition is not sustainable u/s 68 of the Act but confirmed the addition u/s 69 of the Act. 9. In the backdrop of the aforesaid facts and circumstances of the case, we would decide the present appeal ground-wise. GROUND NO.1 10. Ground No.1 is general in nature, hence does not require any adjudication. GROUNDS NO.2 3 11. When we examine the cash deposit of ₹ 20,17,338/- in the saving bank account of the assessee maintained with ICICI Bank which account has not been disclosed by the assessee in his ITR, in the light of the bank statement issued by PNB Housing Finance Ltd., it is proved that the assessee has withdrawn ₹ 10,00,000/- from this account on 11.02.2008. Assessee has duly explained before ld. CIT (A), as is evident form page 7 of the impugned order, as to the cash deposits and documentary evidence in support thereof which is extracted as under :- Now, in support of cash deposits following documents are enclose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lakhs from PNB, deposited with Mahamedha Bank out of which over ₹ 10 Lakhs are withdrawn in Feb.08, unused portion of which is reflected in the Opg. Statement of affair/loan a/c /said saving a/c may be verified in support of contention. 12. When we examine the explanation given by the assessee before the ld. CIT (A), extracted above, in the light of the day-today cash flow statement given by the assessee, available at pages 84 to 87 of the paper book, it is proved that the assessee has duly explained the cash deposit in the bank. 13. Perusal of para 7.1 of the impugned order passed by the ld. CIT (A) also shows that the assessee has duly explained that the cash was deposited out of the firm s drawing and has submitted before the ld. CIT (A) (i) copy of statement of affairs as on 31.03.2008 and of 31.03.2009; (ii) copy of SB A/c with ICICI under question/Mahamedha Bank and loan a/c with PNB of assessee; (iii) copy of capital account in the books of M/s. Allien Ent. as filed before AO; and (iv) copy of day to day running account (Drawing a/c) in the books of M/s. Allien Ent. showing deposits/ withdrawals on day to day basis. 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f M/s. ADR Steel Corporation and M/s. You Like Machinery but confirmation from M/s. Malik Traders was not produced. Even, during remand proceedings, creditors have not appeared in person despite issuance of summons u/s 131 of the Act. 20. Ld. CIT (A) has also rejected the application filed by the assessee under Rule 46A merely on the objections raised by the AO in the remand report. The ld. AR for the assessee contended that he has duly explained the trade creditors of ₹ 43,76,781/- and no addition u/s 68 of the Act is sustainable. Perusal of the impugned order passed by the ld. CIT (A) goes to show that ld. CIT (A) has confirmed the order passed by the AO without applying his independent mind and has not even entertained the additional evidence sought to be led by assessee before AO during remand proceedings. Assessee has explained the trade creditors as under :- Name Amount Evidences filed ADR Steel Corporation 14,80,363/- Purchase bills: PB 144-154, Confirmati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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