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2016 (3) TMI 494 - AT - Income TaxDisallowance on account of sundry creditors - Held that:- No further transaction on account of internal dispute and settlement of claim of the party, the very same amount is appearing in the party's ledger account as closing credit balance as on 31/03/2011. Thus, this being an old account showing opening credit balance in the previous year and there being no other transaction, the same old balance as on 31/03/2011 is carried forward as on 01/04/2011 in the books of account of assessee. Thus, there is no credit/liability of the assessee in the previous year relevant to A.Y.2011-12." Whereas, in page No.6 of appellate order, the CIT(A) came to the conclusion that no evidence whatsoever has been produced before him by the assessee in support of the claim made. In this regard the stand of the assessee has been that he has submitted a paper book duly indexed containing total 89 pages and has categorically submitted that in the normal provisions of the Act, so there was no justification of making impugned addition on account of old credit balance of the creditor concerned for the year under consideration. CIT(A) was not justified in upholding the impugned addition made by the Assessing Officer - Decided in favour of assessee Disallowance on account of interest - Held that:- In the present case, the assessee has paid interest only to three parties as stated above. The same is not on account of any sharafi borrowing but it is a trading liability crystallized during the course of business and has been accepted in the past as well as claimed by the assessee. The assessee has also complied with TDS provisions. The Assessing Officer, while disallowing interest, has not established nexus between interest free creditors-liability and alleged advance given to the aforesaid parties. Therefore, the Authorized Representative for the assessee submitted that the disallowance in question was not justified. Taking into consideration all facts and circumstances of the case and submissions of the ld. Authorized Representative, deem it proper to set aside the order of the CIT(A) on this issue and restore this matter back to the file of the CIT(A) for deciding this issue afresh in the light of aforesaid submissions of the ld. Authorized Representative.- Decided in favour of assessee for statistical purposes.
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