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2014 (1) TMI 1924 - AT - Income TaxBogus sundry creditors - sundry creditors are outstanding and these sundry creditors are on account of supply of materials i.e. iron and steel - HELD THAT:- We find that the CIT(A) has not gone through the details properly. He just simply influenced by the assessment order. First of all it is a fact that these sundry creditors are outstanding as on 31.03.2006 and these sundry creditors are on account of supply of materials i.e. iron and steel. Assessee has also filed confirmations, details of sundry creditors, details of purchases made from FY 2005-06 relating to this AY 2006-07. Even now before us assessee has filed complete details of sundry creditors which are outstanding as on date. Admittedly, these sundry creditors are outstanding out of the purchases made. Assessee submitted the transaction with those sundry creditors were made in the FY 2003-04 and thereafter there was no further business with those parties and those sundry creditors were outstanding due to disputes. Once it is a fact that these sundry creditors are outstanding and assessee has not written off those creditors, these cannot be assessed as income of the assessee. All the parties have confirmed these sundry creditors u/s. 133(6) of the Act as notices were issued by the AO as replied by these sundry creditors. Once this is the position, the sundry creditors cannot be considered as bogus or cannot be assessed as income of the assessee. Hence, we delete the addition and allow this issue of assessee’s appeal. Addition being interest on loan to sister concern as well as business transaction on account of sundry debtor - HELD THAT:- We find that the assessee company has not charged interest on this loan for the reason that during the relevant previous year there was a business transaction taken between the assessee company and this loan debtor M/s. Ganesh Commercial Co. a sister concern, and on that basis the assessee has not charged interest. Once there is commercial expediency, the assessee is not supposed to charge interest on loan debtor. See case of S. A. Builder [2006 (12) TMI 82 - SUPREME COURT] - we allow the claim of assessee. This issue of assessee’s appeal is allowed.
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