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TMI Blog2022 (11) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) has co-terminus powers with the Assessing Officer and could have enquired the matter himself instead of deleting the addition - HELD THAT:- We find that the revenue has accepted that the provisions of Section 68 are not applicable. The ld. A/R submitted that at most Section 41 of the Act could have been resorted to, but in the present case the same is also not applicable as there was no cessation of liability. Thus we do not find any merit in the contentions of the ld DR that the ld CIT(A) have the co-terminus power and could have enquired the issue himself for the reason that these liabilities have not ceased to exist and even the ld CIT(A) could not have invoked section 41(1) to these liabilities. Accordingly this ground of the revenue is dismissed as devoid of merit and is dismissed. Addition u/s 56(2)(vii) in consonance with the provisions of Section 43CA - assessee had purchased immovable properties for a consideration the stamp value whereof is much higher and thus, there was difference - purchase of property by the assessee the value whereof is less than the market value - HELD THAT:- We observe that the assessee has purchased a land for consideration of Rs.2,05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions, issued notices u/s 133(6) of the Act to 39 parties on 14/11/2017 on test check basis. However, 26 notices issued to the creditors were returned unserved whereas two creditors, namely, New Maa Kali Enterprise and Jagannath Traders have denied to have had any transactions with the assessee and the remaining did not respond at all to the notices issued u/s 133(6) of the Act. 5. The assessee is engaged in the business of construction under the name and style of Sun Construction . The Assessing Officer called upon the assessee to produce the books of accounts, ledger, purchase invoices in respect of 39 parties which were duly furnished. The assessee also furnished the bills, documents pertaining to purchase bills, challans and the Assessing Officer did not find any mistake or deficiencies in these documents. However, he added the entire closing balance standing at the credit of these parties which aggregated to Rs.4,19,07,168/- as unexplained cash credit u/s 68 of the Act reasoning that the assesse has not furnished complete details and evidences. 6. In the appellate proceedings, the ld. CIT(A) allowed the appeal of the assessee on this issue after taking into account the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the matter aş envisaged by the A0. The AO's observation on the issue is totally on a wrong footing and hence not tenable under any circumstance. If at all the AO wanted to make an addition, it should have been done u/s 41 of the Act which is not the case here. In any case, there was no remission or cessation of liability inasmuch as in the subsequent assessment year the closing balance at the end of earlier previous year stood as opening balance in that year and there were debit and credit entries in the subsequent year also. Ledger copies have been placed in the paper book to substantiate the above position. Even otherwise, I find that the AR of the assessee had exhaustively supplied the relevant documents/ information during the course of the assessment proceeding and which have not been contradicted by the A0 in any manner. In fact, the AO writes in the second para of the assessment order as follows the A/R of the assessee ShriG. Sikdar, GA appeared from time to time and produced the details and documents as called for...... He also explained various issues and produced he books of accounts, bills and vouchers for the year under consideration . OveralI, I find the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t at the most, the Assessing Officer could have invoked Section 41(1) of the Act to treat these liabilities as income of the assesse subject to the condition, that these liabilities were extinguished during the year. But this is also not the case of the Assessing Officer. The ld. A/R submitted that the closing balance as on 31/02/2013 represents the opening balance of the sundry creditors as on 01/04/2014. The ld. A/R submitted that the credits even if unexplained could not be subjected to tax in the subsequent year and to buttress this contention, the ld. A/R relied on the following decisions:- CIT vs. Prameshwar Bohra (2008) 301 ITR 0404 RajHC. CIT vs. Usha Stud Agricultural Farms Limited (208) 301 ITR 384 (Del) 8.1. Further the ld. A/R submitted that addresses of the parties were available in the database of the Income Tax Department and in the event of non-receipt of the notices u/s 133(6) of Act by these suppliers , the Assessing Officer ought to have exercised his powers to trace these assessees and not to add the outstanding balances in the hands of the assessee. The ld. A/R submitted that the payments were duly made to the sundry creditors in the subsequent y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the assessment, the Assessing Officer did not point out any defect and deficiency in the said documents and primarily relied on the fact that these are either unserved on the recipients or denied by the creditors. So we are to decide whether trade liability could be added u/s 68 of the Act. We have perused the provisions of Section 68 of the Act and find that the provisions of section 68 of the Act are applicable to the money credited during the year in the books of the accounts qua which the assessee has failed to furnish any details thereby not proving the identity, creditworthiness of the creditors and genuineness of the transactions. But this is not the case before us. We observe that these liabilities represented trading liabilities and are beyond the ambit of Section 68 of the Act. The case of the assessee finds support from the decision in case of CIT vs. Prameshwar Bohra (supra), wherein, the Hon ble Gujarat High Court has held that credit which has come into existence in the earlier years and not during the year, cannot be brought to tax u/s 68 of the Act. Similarly, in the case of CIT vs. Usha Stud Agricultural Farms Limited (supra), the Hon ble Delhi High Court has he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances and the ratio of law laid down by various Courts of law as discussed hereinabove , we dismiss Ground Nos. 1 2 of the revenue. 12. The issue raised in Ground No. 3 is against the order of the ld. CIT(A) on the ground that the ld. CIT(A) has co-terminus powers with the Assessing Officer and could have enquired the matter himself instead of deleting the addition. 13. After hearing rival contentions and perusing the orders of the authorities below we find that the revenue has accepted that the provisions of Section 68 are not applicable. The ld. A/R submitted that at most Section 41 of the Act could have been resorted to, but in the present case the same is also not applicable as there was no cessation of liability. Thus we do not find any merit in the contentions of the ld DR that the ld CIT(A) have the co-terminus power and could have enquired the issue himself for the reason that these liabilities have not ceased to exist and even the ld CIT(A) could not have invoked section 41(1) to these liabilities. Accordingly this ground of the revenue is dismissed as devoid of merit and is dismissed. 14. Ground No. 4 is against the order of the ld. CIT(A) deleting the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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