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TMI Blog2022 (5) TMI 1330X X X X Extracts X X X X X X X X Extracts X X X X ..... se finding has been recorded in this regard. During the course of hearing, nothing has been brought to our notice to disturb the said findings of the Ld. CIT(A) and therefore, the said findings remain unrebutted before us. Regarding the general trade practice of import against letter of credit, the Ld. CIT(A) has sought explanation from the assessee where the assessee has submitted that due to long standing business dealings with the suppliers of gypsum in Pakistan, they have not insisted on supply against letter of credit and the supplies have been regularly made against payments through regular banking channels and such practice is going on for a long time and being satisfied, CIT(A) has accepted the said explanation and we do not find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sundry creditors by Rs. 1,91,88,342/-, a show cause notice was issued to the assessee to furnish explanation with respect to large increase in sundry creditors. In response, the assessee admitted the increase in the quantum of sundry creditors and submitted that reason for such increase is attributable to increase in purchase and other direct expenses. However, the submissions so filed by the assessee were not substantiated through independent documentary evidence and a fresh show cause notice was issued to the assessee and inspite of giving specific opportunity, no explanation was received by the AO which showed that the assessee had nothing to say in the matter and, therefore, in absence of requisite explanation supported with documentar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in support of purchases and sundry creditors which were duly admitted and taken on record by the ld. CIT(A) and after calling for the remand report from the AO, the ld. CIT (A) has deleted the addition. It was submitted that regarding the identity of the creditors as well as genuineness of the transactions of imports as underlying the credit balances, no adverse finding has been reported by the AO in the remand proceedings. It was accordingly submitted that the revenue has no case where the AO in the remand proceedings has carried out the necessary verification and has not recorded any adverse findings in this regard and taking into account the remand report of the AO and calling for further information/clarification from the assessee, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts relating to regular imports what have been paid by the banks as Authorized Dealers to the Bank of the exporters of Pakistan in relation to the Invoices raised by the parties is a matter of record and confirmed by the Ld. AO during the remand proceedings. Thus qua the identity, credit-worthiness as well as genuineness of the transactions of imports as underlying the all credit balances there is no dispute and the Ld. AO has in the remand proceedings not brought on record any thing adverse in this connection. The Ld. AO has however submitted that the books of account of the Appellant are liable to be rejected u/s. 145(3) on the basis of the fact that the exchange rate fluctuations have been inconsistently accounted for by the appellant. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve increased from Rs. 2,80,55,799.65 in 2013-14 to Rs. 16,60,53,311.25 in 2014-15 and the turnover of the appellant from Rs. 7,57,65,296.10 to Rs. 28,62,37,139.51 is a matter of record and not in dispute. In view of the entire matrix of facts it is my considered view further that the credit balances added are all on account of trade creditors for purchases/expenses and that the Ld. AO has not brought on record may adverse information with regards to the genuineness of the purchases/imports and that the identity creditworthiness of the Creditors as well and genuineness of the transactions stands established. It is my considered view that there are minor irregularities with regards to the accounting of the exchange rate fluctuations which a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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