9911796707
TMI Blog2025 (1) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... "2. The Ld.CIT(A) erred in deleting addition of Rs. 4,00,00,000/- made towards unexplained expenditure u/s. 69C in respect of trade payable settled outside the books of account as evidenced by seized material coupled with sworn statement of Shri A.N.Boopathy, Director of the assessee company. 2.1 The Ld.CIT(A) erred in deleting addition with observation that the names of Shri Paranthaman and his concerns are not appearing in the loose sheets seized. The Director of the assessee company confirmed in his statement that the closing balance of sundry creditors Rs. 87,04,632/- vide page No. 14 is the actual sundry creditors as on 31.03.2018 since the settlement made with Shri Paranthaman was outside the books of account, it was proposed to introduce fictitious sundry creditors under various names listed in page numbers bearing 11, 12 & 13. It is natural that since the payments are made outside the books of account name of Shri Paranthaman and his concerns did not appear in page 14 (actual creditors) and page 11,12, & 13 (fictitious creditors). The difference in creditor balance between loose sheet No.14 and other pages was duly explained by Director of the assessee company as paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same as undisclosed expenditure from undisclosed sources u/s. 69C of the Act amounting to Rs. 4.00 crores by observing in para 7 as under:- "7. In view of the above, the seized materials and the logical explanation of the entries found therein by Shri.A.N.Boopathy clearly demonstrate the sum of Rs. # CF was settled to Shri.Paranthaman, outside books. As the assessee had not explained the sources for the payments made to Shri.Paranthaman to the tune of Rs. 4 Cr, it is inferred that it has been done from out of the undisclosed income of the assessee and accordingly added to the total income of the assessee for AY:2018-19 as unexplained payments u/s 69C of the Income Tax Act, 1961. Aggrieved, the assessee preferred an appeal before the CIT(A). 4. The CIT(A), after considering submissions of the assessee and entire details referred the matter back to the Assessing Officer for remand report. The Assessing Officer vide his remand report dated 14.12.2023 reiterated the assessment order and the remand report as accepted by the CIT(A) is being reproduced as under:- "2. The assessment proceedings u/s 153C r.w.s. 143(3) of the Act, was completed on 28.09.2021 by making an addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et as on 31.03.2017. The amounts payable to M/s Paranthaman Exporters and M/s Paranthaman Hydraulics and Equipments (Paranthaman concerns) were actually reflected under 'Sundry Debtors' in the balance sheet. The 'Sundry Debtors" are shown at Rs. 13,29,796/- in the balance sheet as on 31.03.2017. The said amount is the net debit amount arrived at after considering the debit balances aggregating to Rs. 4, 10,93, 129/- in the accounts of various debtor parties and the credit balances totalling to Rs. 3,97,63,333/- in the accounts of M/s Paranthaman Exporters and M/s Paranthaman Hydraulics and Equipments. Similarly, in the balance sheet as on 31.03.2018 also, the amounts due to Paranthaman concerns is reflected under 'Sundry Debtors'. The 'Sundry Debtors" are shown at Rs. 6, 11,798/- in the balance sheet as on 31.03.2018. The said amount is the net debit amount arrived at after considering the debit balances aggregating to Rs. 3,98,00,092/- in the accounts of various debtor parties and the credit balances totalling to Rs. 3,91,88,294/- in the accounts of various creditor parties, out of which the amounts payable to Paranthaman concerns amounted to Rs. 3,91,63,33 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not legally sustainable and lacks merit. Accordingly, the all the grounds raised by the Appellant Company upon this issue are hereby treated as allowed and the AO is hereby directed to delete the addition of Rs. 4,00,00,000/- made u/s 69C of the Act. Aggrieved, the Revenue is in appeal before us. 6. We have heard rival contentions and gone through the facts and circumstances of the case. We noted that main contention of the Revenue is that addition made by the AO u/s. 69C of the Act being unexplained expenditure is evidenced by the seized material corroborated by the statement of Shri A.N.Boopathy, Director of the assessee. We have gone through the seized materials and note that seized materials at page 14 does not contain any evidences, whatsoever that trade payables of Rs. 4.00 crores to Shri Paranthaman concern as on 31.03.2017 were settled / paid in cash to the said concern during the financial year 2017-18 relevant to the assessment year 2018-19 outside the books of accounts. We noted that the CIT(A) has discussed this issue at length and gave clear finding of fact that seized material is devoid of any evidence regarding alleged payment of trade payables due of Shri Parant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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