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TMI Blog2020 (9) TMI 1275X X X X Extracts X X X X X X X X Extracts X X X X ..... the DR that fresh opportunity should be given to the CIT (A) to examine the transaction does not have any force. As no merit in the addition made by the Assessing Officer and sustained by the ld.CIT(A). accordingly, direct the Assessing Officer to delete the impugned addition. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under section 133(6) of the Act. The Assessing Officer completed the assessment by devising a formula not known to Income tax proceedings and came out with a whimsical result. The relevant findings of the Assessing Officer read as under: "7. Since it is not possible to verify all outstanding sundry creditors and it would be logical if findings of the sample are extrapolated to the outstanding sundry creditors, thus giving benefit of majority of confirmed amount to the assessee. Accordingly, sundry creditors not found to be genuine to be added u/s 68 would be Unverified amount X total outstanding creditors sample size 799173 x 62158180 = 1186168 41878671 5. In light of the aforestated fantastic computation, the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer has accepted the sales figures but has also accepted that total purchases. The two most relevant decisions of the Tribunal need mention here: "124 TTJ 554 (Del) Elnad International (p) Ltd. v DCIT "5.4 we have considered the facts ofthe case and rival submissions. From the submissions made before us, it is clear that the transactions of purchase and sale were recorded in the books of account and these transactions led to profit to the assessee, which was brought to tax, If sales have been effected out of purchases made from these parties, then, it cannot be said that the purchases were bogus. The finding of bogus sale can only lead to the inference that the corresponding amount should be deleted from the turno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed as expenditure only on being satisfied that itwas a genuine purchase on credit. Implicitly, the nature and source of the amount credited has also to be taken as having been explained satisfactorily. Another possible argument can be that in such a case, the amount credited is not a cash credit in the sense that mere monies have been received by the assessee, but the credit represents a liability payable by the assessee in future. Under accounting principles, a liability can only be brought into account by a credit entry in the books of account in favour of the person to whom the money is payable' Thus, there is marked difference between a credit representing a liability payable by the assessee and a credit representing monies re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e examined the transaction if he wanted to invoke the provisions of Section 68 of the Act. Failing which the action of the CIT (A) cannot be upheld. The contention of the DR that fresh opportunity should be given to the CIT (A) to examine the transaction does not have any force. In my considered view, no second innings should be given to examine the same set of facts which were very much before the lower authorities. I do not find any merit in the order of the CIT(A). I have accordingly direct the A.O to delete the addition of Rs. 4,97,589/. The appeal filed by the assessee is accordingly allowed." 13. In the light of the afore-mentioned decisions, I do not find any merit in the addition made by the Assessing Officer and sustained by the l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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