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TMI Blog2022 (5) TMI 1018X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Appellant to furnish the evidence to prove the genuineness of such credit balance and the Appellant was unable to avail of such opportunity. Consequently, on Questions (ii) and (iii), this Court answers the Questions in the affirmative i.e. in favour of the Department and against the Assessee. Addition of inflated credit balance of RIL - HELD THAT:- This Question is answered in the negative and relying on the decisions of the Courts, the question of addition is remanded to the CIT(A) for examining it afresh in light of the evidence produced by the Assessee, which was not examined earlier. For this purpose, the matter would be listed before the CIT(A) on 18th July, 2022. It will be open to the CIT(A) to seek a fresh remand report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the ITAT was right in law in confirming the addition of Rs.6,62,393/- on account of unexplained/non-existence alleged sundry creditors? 3. The background facts are that the Assessee is engaged in manufacture of PVC pipes and fittings. For the AY in question, the Assessee filed its return of income on 28th November 2003 disclosing an income of Rs.3,67,370/-. The aforementioned return was processed initially under Section 143 (1) of the Income Tax Act, 1961 (Act) and the Assessee was granted a refund of Rs.10,200/-. Subsequently, however, the Assessing Officer (AO) i.e., the Assistant Commissioner of Income Tax (ACIT), Balasore Circle, Balasore issued notice to the Assessee under Section 143 (2) and 142 (1) of the Act. The AO asked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Accordingly, the aforementioned amount being the inflated credit balance of RIL was added as the income of the Assessee. 8. Likewise, as regards other sundry creditors, the Assessee had disclosed a credit balance of Rs.5,97,210/- in the name of Kabra Extrusion Technik Ltd. (KETL) Mumbai whereas the copy of the account of the Assessee in the books of KETL revealed that the credit balance should have been Rs.39,757/- as on 31st March, 2003. Again, the explanation offered by the Assessee was not accepted and the excess credit balance of Rs.5,57,453/- was considered as income of the Assessee and this amount was added to the taxable income. Similarly, in the case of Coastal Road Carriers (CRC) and Air Control Chemical Company Ltd. (ACCCL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly, this addition was also not interfered with. 12. This Court heard the submissions of Mr. Prakash Kumar Jena, learned counsel for the Appellant and Mr. R. Chimanka, learned Senior Standing Counsel for the Income Tax Department. 13. Mr. Jena, learned counsel appearing for the Appellant pointed out that the AO had mentioned credit balance instead of debit balance and not considered the debit balance of KME amounting to Rs.25,74,770.29/-. In the memorandum of appeal, an entire reconciliation statement as per the ledger account of RIL and KME has been set out. It was contended that treating the debit balance of KME of Rs.1,65,32,778/- as income was erroneous in terms of accounting standards. The debit balance of 25,74,770.29/- in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to avail of such opportunity. Consequently, on Questions (ii) and (iii), this Court answers the Questions in the affirmative i.e. in favour of the Department and against the Assessee. 16. However, as regards Question No.(i), this Question is answered in the negative and relying on the above decisions of the Courts, the question of addition of Rs.41,78,650/- is remanded to the CIT(A) for examining it afresh in light of the evidence produced by the Assessee, which was not examined earlier. For this purpose, the matter would be listed before the CIT(A) on 18th July, 2022. It will be open to the CIT(A) to seek a fresh remand report from the AO and in particular, after issuing notice under Section 131 of the Act to KME to ask for its books ..... X X X X Extracts X X X X X X X X Extracts X X X X
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