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TMI Blog2022 (11) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... the business of manufacturing of kraft papers & trading of husk. The e-return for the assessment year 2013-14 filed on 01-10-2013 declaring loss of Rs.(-)8,20,02,734/-. Case of assessee selected for scrutiny followed by serving of valid notices u/s. 143(2) and 142(1) of the Act. Various details were called by the ld. AO and submissions were filed by the assessee. After considering the same the assessment was completed u/s. 143(3) of the Act assessing income at Rs.3,17,36,000/- making certain additions. 3. Aggrieved, the assessee preferred appeal before the ld. CIT(A) and partly succeeded. 4. Aggrieved, the revenue is now in appeal before this Tribunal raising the following grounds of appeal:- 1. That en the facts and the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther observe that the assessee provided complete details of sundry creditors along with the entries in the ledger account in order to show that various cheque return entries have been wrongly considered as purchases by ld.AO. We further find that the ld. CIT(A) after carefully examining the details filed by the assessee, deleted the addition observing as follow:- "Ground No. 2 is relating to addition of Rs.1,97,30,393/ u/s 68 of Income Tax Act, 1961 owing to difference in the balance of certain creditors. The Assessing Officer had observed in the Assessment order that notice u/s 133(6) of Income Tax Act. 190 i was issued to certain creditors and replies from certain creditors had been received and in two cases i.e M/s Raja Builders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. During the course of appellate proceedings the reason for the difference in the balances were submitted along with the supporting and the same was perused. It is apparent from the detail' furnished that the Assessing officer had erred in not considering the fact that the appellant company had considered the transactions under various heads of purchases and the primary reason for the difference was cheque return entries. The cheque return entries are part of the bank statement of the appellant company. Further the cheques issued to the parties were subsequently cleared or the matter is subjudice as legal proceedings had been initiated against the appellant company for dishonoring the cheque u/s.138 of Negotiable Instrument Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of sundry creditors balance in case of M/s. S.D Trading Co. and M/s. Raja Builders. Complete details of the submissions along with their addresses and items purchased along with amount were filed before the ld. CIT(A). The said purchases were used by the assessee in carrying out its manufacturing activities. Based on these details the ld. CIT(A) deleted the addition observing as follows:- ´The Assessing officer had made the addition on the plea that notice u/s 133(6) of Income Tax Act, 1961 had returned unserved. The assessing officer had intimated the return of notice to the appellant company and in response to the same the appellant company had intimated about the change of address in case of M/s S D Traders. However the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount of purchases. These details were available before assessing officer also. The judicial precedents and the facts that assessee was engaged in manufacturing activity which could not have been carried out without actual purchase of material, the purchases cannot be treated as bogus simply because the suppliers did not confirm the purchases during the year The transactions are arising out of the trade relations. Hence considering the fact that the balances of the parties was pertaining to earlier years or transfer of balance of group concern which had been demonstrated before the A.O. as well as undersigned the addition made on the premises that the credits are not explained is hereby deleted. 11. The above finding remains uncontrov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty had shown receipt of payment of Rs. 94.66,591/. The Assessing officer had added the difference of Rs. 26,22,714/. The appellant company was asked to explain the difference. The appellant company had submitted the reconciliation of the balance and had submitted that the appellant company had made purchase of husk from t e said party and accounted for the difference in power & fuel. However the Assessing officer .bad not accepted the contention and made the addition under unexplained expenditure u/s 69C of the Income Tax Act, 1961 and further invoked the provision of Section 115BBE of I. T Act, 1961. The A/R had submitted the details in support of its contention. It is not understood that when the party itself is acknowledging th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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