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TMI Blog2023 (2) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... er. AO at no point of time stated that the trade deposits were not that of trade depositors but has element of liabilities except to that of business of the assessee. The contention of the assessee that the assessee has not paid the amount in respect of these trade depositors as it being amount received as trade deposits from trade merchants who are known and identifiable persons and the amount received during the course of business and creditworthiness is already proved through the full name, address, PAN and the amount of deposits as well as the customers usage and practice of business with these trade merchant. Merely not filing confirmation will not shun away that the trade credits and deposits were for purchase of goods and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellate order. 2.(a) Your Appellant submits that these are Trade Credits and deposit towards purchase of goods and that the amount has not become Time Barred and that the same has not been Written off by the Appellant in his Books of Account and therefore Sec. 41(1) cannot be made applicable. (b) Further without prejudice, it is submitted that the amount so received as trade deposit or advance which have been not allowed as an expenditure in computing Total Income and therefore Sec.41(1) is not applicable. 3. The CIT(A) also erred in confirming addition of Rs.13,80,000/- added by Assessing Officer u/s.68 of the Act and your Appellant strongly submits that on facts case it being amount received as trade deposit from Trade Merch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer also made observation that the assessee s declared total deposits of Rs.68,80,000/- out of which Rs.37,80,000/- were received during the year under consideration. Therefore, there is opening liability of Rs.31,00,000/- (excluding Rs.10,00,000/- repaid during the year). Out of this opening balance, the assessee submitted confirmation of Rs.5,00,000/- only. Thus, for the remaining amount that of Rs.26,00,000/- no documentary evidence was submitted and hence made the addition as liability of the assessee ceases to a exist within the meaning of provisions of Section 41(1) of the Act. Thus, the Assessing Officer made addition of Rs.39,80,000/-. The Assessing Officer also made addition of Rs.24,82,822/- towards the claim of bad debt whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edited are payable are returnable deposit and/or liable to be adjusted against supply of goods deposit and liability has not ceased. Ld. AR relied upon the decision of Hon ble Gujarat High Court in the case of CIT vs. Bhogilal Ramjibhai Atara (2014) 222 taxman 313 (Guj), CIT vs. Nitin S. Gargh (2012) 208 Taxman 16 and CIT vs. G.K. Patel Co. (2013) 212 Taxman 384. Ld. AR submitted that neither Section 41(1) nor Section 68 of the Act applies and the entire addition of Rs.39,80,000/- which including addition of Rs.13,80,000/- as well as Rs.26,00,000/- should be deleted. Ld. AR further submitted that the decision of Hon ble Gujarat High Court in the case of CIT vs. Shankar U. Jatwani, Tax Appeal No. 583 of 2016 dated 27.07.2016 wherein the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. The Ld. AR submitted that the assessee has not made any Net Profit and the final income is a loss and, therefore, even by way of alternative submission no profit/income is liable to be added under Section 68 of the Act. 7. The Ld. DR submitted that the assessee has filed additional evidences related to Rule 29 of Income Tax Appellate Tribunal Rules, 1963, the same should be rejected at this juncture. Ld. DR further submitted that no confirmation of the parties were filed by the assessee and there is no account or estimation of the liability. Thus, the Assessing Officer as well as the CIT(A) has rightly made addition of Rs.39,80,000/-. 8. Heard both the parties and perused all the relevant material available on record. The additi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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