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2014 (11) TMI 796 - AT - Income TaxAddition of outstanding balance of certain creditors – Failure to comply with notices issued u/s 136(6) – Held that:- AO failed to offer any comment on the evidences filed by the assessee and insisted for sustenance of disallowance on the basis that notices u/s 133(6) remained uncomplied with - details submitted by the assessee before CIT(A) wherein the invoices raised by the parties along with the copies of bank statement from where the payments were made, are placed – the action of CIT(A) in confirming the addition on the basis of non filling of confirmations, is not justified - CIT(A) should have considered the evidences filed by the assessee during appellate proceedings but he failed to consider the same and exclusively relied upon the remand repot of the AO - assessee had demonstrated that credit balances were due to genuine business transactions and in succeeding years, the payments were actually made to these parties - Section 68 relied upon by Ld. CIT(A) is not applicable in the present case as Section 68 relates to unexplained credit outstanding in the books of account of the assessee whereas the outstanding amounts in the books of account of the assessee related to business transactions of the assessee – Decided in favour of assessee. Ad hoc disallowance on Administrative expenses – Held that:- The AO failed to provide any adverse comments during remand proceedings and, therefore, ad-hoc addition of 10% of expenses without furnishing any cogent reason is not justified and CIT(A) has deleted the same - decided against revenue.
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