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2015 (1) TMI 358 - AT - Income TaxDeletion on bogus sundry creditors – transaction unexplained expenses or not – relief granted without proper justification - Held that:- Revenue contended that the CIT(A) has granted relief to the assessee without proper justification - the AO has made his findings and it is also apparent from examination of records that the assessee has not conducted any business activity during the year - There was no purchase and sales during the year under consideration - some transactions are there in respect of sundry creditors and sundry debtors - the AO has made examination and found that they are not genuine - The ledgers in the name of M/s. Shilpashree Saree and M/s. S.S Textiles in the books of the assessee company revealed that some payments were given by cheques - The Bank Manager was requested to furnish the copies of the cheques issued to M/s. Shilpashree Saree and M/s. S.S Textiles - The copies of the cheques as collected from the Bank ascertained that the assessee did not issued cheques to M/s. Shilpa Shree Saree and M/s. S.S Textiles, but issued to M/s. Kalna Machines Pvt. Ltd and Vikash Chowdhury, one of the directors of the assessee company. CIT(A) has found that the AO was being asked to enquire the transactions - the powers of the CIT(A) are coterminus with that of the AO - If the AO has failed to perform the necessary examination, then it was incumbent on the CIT(A) to make necessary verification and satisfy himself - CIT(A) has drawn adverse inference by finding that the AO has not made proper examination - CIT(A) has observed that even if the business is held to be a sham affair and the receipts are held to be bogus, it is beyond the stretch of imagination that the other parts of the trading account/profit and loss from other sources - this not a proper finding – in Kapurchand Shrimal Vs. CIT [1981 (8) TMI 2 - SUPREME Court] it has been held that it is the duty of the appellate authority to correct the lacuna in the proceedings of the authorities below and also to remit the matter, if required - this is not correct as the CIT(A) has not given proper findings after due examination – the matter is to be remitted back to the AO for verification – Decided in favour of revenue.
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