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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 ..... for in response to notice u/s. 142[1] of the Act and the mere absence of confirmation letters from trade creditors was not fatal especially since the appellant had filed the ledger accounts showing payments made to these sundry creditors through banking channels in the subsequent financial year under the facts and in the circumstances of the appellant's case. 3. The learned CIT[A] is not justified in upholding the addition of Rs. 4,76,430/- made towards sundry creditors for vehicle maintenance 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 absence of confirmation letters from trade creditors was not fatal especially since the appellant had filed the ledger accounts showing payments made to these sundry creditors through banking channels in the subsequent financial year under the facts and in the circumstances of the appellant's case. 4. The learned CIT[A] is not justified in disposing off the appeal without allowing sufficient and effective opportunity to the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditional evidences nor confronted those additional evidences to the AO for his verification. Therefore, we are of the considered view that there is violation of Rules 46A of the IT Rules, 1962, in as much as not providing opportunity to the AO to comment on additional evidences filed by the assessee during appellate proceedings. Hence, the issue to the file of the AO and direct him to reconsider the issue in light of additional evidences filed by the assessee to justify sundry creditors for statistical purposes." 2.1 On remittance to the ld. AO, the AO asked various details in order to elicit the identity, genuineness and creditworthiness of the creditors. However, assessee did not reply to any of the questions asked vide notice issued u/s 142(1) of the Act dated 15.9.2021. Later, vide letter dated 30.8.2021 furnished certain details and after perusal of the reply filed by the assessee, the ld. AO observed as under: "8. Thus, after perusal of the only response filed by the assessee dated 30.8.2021, the assessment is completed as under: (i) The assessee has not furnished any confirmation letters in respect of these creditors. The onus lies on the assessee to prove the genuinen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal. In the absence of supporting documents and evidences and submission, the NFAC has confirmed the order of ld. AO. Against this, assessee is in appeal before us. 3. We have heard the rival submissions and perused the materials available on record. Admittedly, there was no response from the assessee before NFAC. As such, NFAC has confirmed the order of the ld. AO. Before us, ld. A.R. submitted that these are trade creditors emanated from the purchases made by assessee in the assessment year under consideration. Once the department has accepted the purchases as genuine, the other limb of the same transaction being a trade creditors cannot be doubted or no addition could be made on this count. For this purpose, he relied on the judgement of Allahabad High Court in the case of CIT Vs. Pancham Dass Jain (205 CTR 444) and for the same purpose, he also relied on the order of the coordinate bench in the case of Smt. Madhu Solanki in ITA No.974/Bang/2009 dated 9.8.2021, wherein held as under: "14. We have heard rival contentions on this issue and perused the record. The undisputed fact is that the assessing officer has made addition of outstanding trade creditors u/s 68 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 68 are applicable and it is for the assessee to prove satisfactorily the nature and source of the monies....." 12. Similar view has been expressed by Hon'ble Delhi High Court in the case of CIT vs. Ritu Anurag Agarwal reported in 2009 (7) TMI 1247 as under:- "This finding of AO remained undisturbed before the CIT(A) as well and has been accepted by the ITAT. Proceeding on this basis, the ITAT observed that the soles, purchases as well as gross profits as disclosed by the assessee have been accepted by the Assessing Officer. Once this is accepted, we are of the opinion that the approach of the ITAT was correct inasmuch as the Assessing Officer did not consider this aspect while making additions of sundry creditors under Section 68 of the Income Tax Act. As there was no case for disallowance for corresponding purchase, no addition could be made under Section 68 inasmuch as it is not in dispute that the creditors outstanding related to purchases and the trading results were accepted by the AO. We are, therefore, of the opinion that no substantial question of law arises for consideration in this case. The appeal is accordingly dismissed." 13. The Ld D.R placed his reliance on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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