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2019 (10) TMI 711 - AT - Income TaxAddition u/s 68 - unexplained credit - HELD THAT:- The premise of the addition made by the Assessing Officer was that certain balances do not match with the accounts of the creditors. Now when the difference has been reconciled and balance has been explained and accounts got tallied, then where is the question of drawing any adverse inference. Even if in the first instance the balance was not tallying with the accounts of the creditors, then also, how the authenticity and credibility of third party accounts is given more precedence to the assessee’s account when assessee has shown purchase bill wise details and corresponding sale and stock, matching with the bank accounts and entire transaction is through cheque. If the books accounts alongwith purchase and sales have not been doubted then account of sundry creditors cannot be doubted when there is running account and all the purchase have been settled either in this year or in subsequent year. Bogus purchases - ld. counsel before us has categorically pointed out that the assessee vide submission dated 17.09.2018 had specifically stated before the Ld. CIT (A) that all the bills of purchase and sales were available which were also produced before the Assessing Officer and same can also be produced once again if so desired for necessary verification. He especially drew our attention to the letter written to the Ld, CIT (A). Despite such a categorical averment, and without any such verification of the material on record, the addition has been confirmed. Addition on account of M/s. Arcotech Ltd. - assessee during the course of assessment proceedings had filed ledger account of the said party from which certain balance outstanding were noted by the Assessing Officer. At the fag end he had tried to send notice u/s. 133(6) to the said creditor but the response could not be received by the AO till the completion of the assessment. However, in the remand proceedings again inquiry was conducted by the Assessing Officer and the confirmations along with bank statements, ITR’s and ledger account was received in response to notice u/s 133(6) and after verification he found that the credit balance have been reconciled or is matching with the books of account of the assessee. The assessee had also stated that bills of purchase and sales were available and are tallying with the accounts. Thus, when accounts and the amount stands reconciled and purchases are not in doubt, then no adverse inference can be drawn on the basis of finding given in the assessment proceedings that balance could not be reconciled. Under these circumstances, we do not find any reason as to how addition could be made or confirmed. Similarly, with regard to the A.V. Infraprojects Pvt. Ltd. and M/s. Progressive Alloys India Pvt. Ltd. also similar confirmations with the ledger account, bank statements, ITRs etc. have been received and Assessing Officer has found that the balance shown by the party and the assessee are tallying and all the transactions are matching from the bank statement. Thus, under these circumstances, no addition could have been made. Otherwise also, if the amount represents purchases made by the assessee on credit that does not mean that provision of Section 68 are attracted, if on inquiry made in the remand proceedings there is no adverse material against the assessee. Thus, no addition can be made. Accordingly, the additions made by the Assessing Officer and confirmed by the Ld. CIT (A) are directed to be deleted.
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