9911796707
TMI Blog2019 (11) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... sundry creditors. The Hon'ble Delhi High Court in the case of Ritu Anurag Agarwal [ 2009 (7) TMI 1247 - DELHI HIGH COURT] has held that when there was no disallowance for corresponding purchases and the trade results were accepted by the Assessing Officer, no addition can be made u/s 68 in respect of the outstanding sundry creditors related to purchases. The various other decisions relied on by the ld. counsel in his paper book also support his case. CIT(A) is not justified in sustaining the addition made by the Assessing Officer on account of the sundry creditors in whose cases the letters issued u/s 133(6) were either returned unserved or were not complied with and the assessee failed to produce them. Accordingly, the order of the CIT(A) is set aside and the grounds raised by the assessee are allowed. Lumpsum disallowance on account of unverifiable freight expenses - HELD THAT:- When the Assessing Officer had not rejected the books of account and no specific amount has been doubted and the accounts are audited and the auditors have also not pointed out any defects, the addition made by the Assessing Officer and sustained by the CIT(A) is not justified. I find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is an individual and is engaged in the trading of buffalo omasum and meat. He filed his return of income on 30th September, 2008 declaring the total income at ₹ 2,53,216/-. During the course of assessment proceedings, the Assessing Officer noted that there are six creditors, namely, Shri Atiq Qureshi, Farique Qureshi, Gayasuddin Qureshi, Husnain and Javed and the total amount payable to them was ₹ 11,69,600/-. He issued notice u/s 133(6) to these creditors. Out of five creditors three unserved envelopes in the case of Shri Shri Husnain, Atiq Qureshi, Shri Farique were received back with the Postal remarks: incomplete address. So far as the other two creditors are concerned, neither any reply was received nor unserved envelopes were received back. He, therefore, asked the assessee to produce the creditors for his examination and recording of statements. However, the assessee could not produce those creditors before the Assessing Officer nor could produce any credible evidence to his satisfaction. The Assessing Officer, therefore, treated these creditors as bogus and made addition of ₹ 11,69,600/- to the total income of the assessee. In appeal, the ld.CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ok, the ld. counsel drew the attention of the Bench to the ledger account of all those parties and submitted that the assessee is having regular transaction with those parties and payments have been made to them subsequently. Referring to page 10 of the paper book, the ld. counsel drew the attention of the bench to the list of sundry creditors as on 3rd March, 2009 wherein some of the creditors are appearing. Referring to copy of the order for assessment year 2011-12 and 2012-13 which are placed at paper book pages 29 to 31, he submitted that the Assessing Officer in the orders passed u/s 143(3) for both the years has not made any addition on account of such sundry creditors. Referring to the decision of the Hon'ble Delhi High Court in the case of CIT vs. Ritu Anurag Agarwal (2010) 2 taxmann.com 134 (Del) , he submitted that in that case the Assessing Officer had doubted the veracity and genuineness of sundry creditors of an amount of ₹ 1 lakh and above as shown by the assessee in her books of account on the ground that they were neither income tax assessees nor having PANs and the assessee failed to produce books of account entries regarding sales and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objection if the matter is restored to the file of the Assessing Officer with a direction to the assessee to produce the creditors before the Assessing Officer for his examination. 8. I have considered the rival arguments made by both the sides and perused the orders of the authorities below. I have gone through the paper book and the various case decisions cited before me. I find the Assessing Officer made addition of ₹ 11,69,600/- in respect of five creditors on the ground that the letters issued u/s 133(6) to them were either returned unserved or no reply was received from some of the parties and the assessee failed to produce them or furnish any credible evidence. I find the ld.CIT(A) sustained the addition so made by the Assessing Officer, the reasons for which have already been reproduced in the preceding paragraphs. It is the submission of the ld. counsel for the assessee that when the purchase and sales have been accepted and books were not rejected and when the assessee is having regular transactions with the said parties and in subsequent years the assessments have been completed u/s 143(3) without making any addition, therefore, no addition is call ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o produce them. Accordingly, the order of the CIT(A) is set aside and the grounds raised by the assessee are allowed. 9. In ground No.4, the assessee has challenged the order of the CIT(A) in sustaining the lumpsum disallowance of ₹ 80,000/- made by the Assessing Officer on account of unverifiable freight expenses. 10. After hearing both the sides, I find the assessee had claimed the expenses under the head Freight totaling to ₹ 4,81,500/-. Since the assessee did not produce the bills and vouchers and no explanation was given, the Assessing Officer made a disallowance of ₹ 80,000/- on ad hoc basis which has been upheld by the CIT(A). 11. It is the submission of the ld. counsel for the assessee that when the Assessing Officer had not rejected the books of account and no specific amount has been doubted and the accounts are audited and the auditors have also not pointed out any defects, the addition made by the Assessing Officer and sustained by the CIT(A) is not justified. I find some merit in the above arguments of the ld. counsel. Admittedly, the accounts of the assessee are audited u/s 44AB ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
