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TMI Blog2020 (4) TMI 857X X X X Extracts X X X X X X X X Extracts X X X X ..... nd argued that the difference was not related to purchase and sales and it was due to the amounts received and the supplies made to the creditor. In any case there was a difference in creditors account which was shown excess credit balance and in the absence of proper reconciliation and the source the entire difference of credit balance required to be brought to tax. Hence argued that no interference is called for in the order of the Ld.CIT(A). Enhancement of income by the CIT(A) - objection of the assessee that the CIT(A) has enhanced the assessment without giving the enhancement notice - HELD THAT:- AO made the addition of ₹ 47,64,594/- under the head unproved sundry creditors and the Ld.CIT(A) confirmed the addition of ₹ 25,50,000/-, thus given part relief to the assessee. Since there was no enhancement of addition made by the AO, there is no case for giving enhancement notice, hence the order passed by the Ld.CIT(A) is within the law. In addition to the above, the Ld.CIT(A) has accepted the written submissions and forwarded the same to the AO. The remand report was furnished to the assessee, calling his objections. As per the remand report, there was a differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A.Y.)2014-15. 2. All the grounds of appeal are related to the addition made by the Assessing Officer (AO) under the head sundry creditors . During the assessment proceedings, the AO found outstanding sundry creditors to the extent of ₹ 4,52,79,448/- in sixteen cases out of which in nine cases, the outstanding balance remained the same. Fresh creditors were introduced in five cases. In the earlier year, the AO treated 20% of the sundry creditors as unproved for assessee s failure to furnish the confirmations. In the year under consideration also, the assessee did not furnish the confirmation letters from the sundry creditors in respect of outstanding balance to the extent of ₹ 2,38,22,971/-. Hence, the AO treated 20% of the unproved credits of ₹ 2,38,22,971/- which worked out to ₹ 47,64,594/- and added back to the income. 3. Against which the assessee went on appeal before the CIT(A) and filed written submissions. The Ld.CIT(A) forwarded the written submissions of the assessee to the AO and called for remand report. The AO submitted the remand report which was forwarded to the assessee for submitting counter comments. In the remand report, the AO su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be remitted back to the file of the AO to decide the issue after verification of facts. 5. Per contra, the Ld.DR argued that in the instant case, the assessee has submitted written submissions which were forwarded to the AO and the remand report of the AO was also given to the assessee for his comments. Afterwards the Ld.CIT(A) heard the assessee and passed the orders, thereby Ld.CIT(A) followed the principles of natural justice .There was a difference of ₹ 25,50,000/- in the case of Sri Venkateswara Iron Corporation, which the assessee failed to reconcile either before the AO or before the Ld.CIT(A). As seen from the assessment order before the AO as well as the Ld.CIT(A), the assessee has stated that the discrepancy could not be reconciled due to non availability of vouchers and bills. The assessee further stated that sales were affected in favour of the party, but the same were not entered in the books and he has also requested to assess the gross profit @5.58% on unaccounted sales. Thus the assessee himself has stated before the AO as well as the Ld.CIT(A) that the difference was due to unaccounted sales. The assessee has taken different argument before the ITAT stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot binding on the Ld.CIT(A). 6.1. The Ld.DR further argued that the Ld.CIT(A) has given full opportunity to the assessee to explain the difference and the assessee failed to explain the difference before the Ld.CIT(A) and even before the ITAT. The Ld.AR has no explanation whatsoever with regard to difference, therefore, argued that the Ld.CIT(A) has rightly confirmed the addition of ₹ 25,50,000/- and no interference is called for. Accordingly, requested to dismiss the appeal of the assessee. 7. We have heard both the parties and perused the material placed on record. The first objection of the assessee in this case is that the Ld.CIT(A) has enhanced the assessment without giving the enhancement notice which according to him is bad in law. We have gone through the orders of the lower authorities and observed that the AO made the addition of ₹ 47,64,594/- under the head unproved sundry creditors and the Ld.CIT(A) confirmed the addition of ₹ 25,50,000/-, thus given part relief to the assessee. Since there was no enhancement of addition made by the AO, there is no case for giving enhancement notice, hence the order passed by the Ld.CIT(A) is within the law. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sactions were due to the differences in purchases and sales which could not be reconciled. In spite of giving the opportunity to the assessee at the remand stage and before the Ld.CIT(A), the assessee failed to reconcile the difference. The assessee did not prove the difference with purchase, sales registers and stock register. Hence, the Ld.CIT(A) confirmed the addition. Before us, the Ld.AR advanced argument stating that there was a factual mistake in the order of the Ld.CIT(A) and the difference was due to payments received. The argument of the assessee is inconsistent and not acceptable without proper reconciliation. The assessee has furnished the account copy in page No.82 of the paper book for the period 15.06.2013 to 30.10.2013 with brought forward balance, but has not furnished the complete account. However, it is undisputed fact there was a difference of ₹ 25,50,000/- which the assessee has over stated as at the end of the year under consideration and it is the obligation of the assessee to reconcile the difference and explain the reasons for difference with documentary proof. During the appeal hearing, the assessee was asked to explain the difference and reconcile t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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