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TMI Blog2024 (3) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... ile of NFAC/CIT(A) to decide the same after giving opportunity of hearing to the assessee. Appeal of the assessee is partly allowed for statistical purposes. - Shri George George K., Vice President And Shri Chandra Poojari, Accountant Member For the Assessee : Shri V. Srinivasan, A.R. For the Revenue : Shri AParithivel, D.R. ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER: This appeal by assessee is directed against order of NFAC for the assessment year 2010-11 dated 29.9.2023 passed u/s 250 of the Income Tax Act, 1961 (in short The Act ). The assessee has raised following grounds of appeal: 1: The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The learned CIT[A] is not justified in upholding the addition made u/s. 68 of the Act amounting to Rs. 2,79,54,672/- towards sundry creditors as on 31/03/2010 on the ground that the identity and creditworthiness of the party and genuineness of the transactions are not proved without appreciating that the appellant had furnished the information sought for in response to notice u/s. 142[1] of the Act and the mere a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt order that the AO has made additions towards sundry' creditors mainly on the ground that the assessee could not file confirmations from the creditors to prove genuineness of transactions. We further noted that the assessee has filed confirmations from the parties before the learned CIT(A) during appellate proceedings. The learned C1T(A), after considering additional evidences filed by the assessee, deleted additions made towards sundry' creditors for materials and sundry creditors for vehicle maintenance charges without confronting those additional evidences filed by the assessee to the AO for his comments. No doubt, the C1T(A) has coterminus powers with the AO, therefore he can verify additional evidences filed by the assessee on his own without confronting those additional evidences to the AO. but before admitting such additional evidences, the learned CIT(A) has to record reasons as to why such additional evidences have been admitted and also carry out necessary verification before granting relief to the assessee. In this case, the learned CIT(A) has neither assigned any reasons for admitting additional evidences nor confronted those additional evidences to the AO for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Hence it can be safely presumed that the assessee has nothing to say in this matter. Hence the draft assessment order is been finalized herewith. 10. Hence, a proposal for additions of unexplained Sundry Creditors to the extent of Rs. 2,79,54,672 Rs. 4,76,430/- is added to the income Hence, a sum of Rs. 2,79,54,6727- and Rs. 4,76,430/- is added as unexplained sundry creditors to the to income of the assessee u/s 68 of the Act. 10. Total income of the assessee assessed as under: Total Returned Income : Rs. 63,01,850/- Add: 1. Sundry creditors for materials not proved : Rs. 2,79,54,672/- 2. Sundry creditors for Vehicle maintenance not proved : Rs. 4,76,430/- Total Income assessed R/o : Rs. 3,47,32,950/- 2.2 Against this assessee carried the appeal before CIT(A)/NFAC. Before NFAC, no reply has been filed. Accordingly, the NFAC observed that ld. AO has passed speaking order with detailed discussion on the issue involved therein and the assessee has not pursued the appeal before NFAC. No documents or submissions were provided by the assessee substantiating its grounds of appeal. In the absence of supporting documents and evidences and submission, the NFAC has confirmed the order of ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 some monies have been received by the assessee, but the credit represents a mere liability payable by the assessee in future. Under accounting principles, a liability can only be brought into account by making 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 received from another person. It is because of this distinction, a liability for purchase which has been credited in the account of the supplier cannot be added under section 68 of the Act, more so when the purchase has been accepted as genuine and a deduction there for has been allowed. In all other cases including the case of a credit representing the sale proceeds of an asset, the provisions of section 68 are applicable and it is for the assessee to prove satisfactorily the nature and source of the monies .. 12. Similar vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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