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2023 (1) TMI 1083 - AT - Income TaxAddition of Sundry creditors and unsecured loans - re-payment of impugned sundry credit - non-submission of the relevant details and evidences in respect of the sundry creditors and unsecured loans - HELD THAT:- Hon’ble Jurisdictional High Court in CIT Vs Ayachi Chandrashekhar Narsangji [2013 (12) TMI 372 - GUJARAT HIGH COURT] held that where department has accepted repayment of loan in subsequent financial year, no addition was to be made in the current year on account of cash loan. Further, in case of CIT Vs Ranchod Jivabhai Nakhava [2012 (5) TMI 186 - GUJARAT HIGH COURT] held that where the lenders of the assessee are income tax assessee whose PAN have been disclosed, the assessing officer cannot not ask assessee to further prove genuineness of the transaction without first verifying such facts from income tax returns of lenders. We also find that in the present case, the assessee furnished all such details of the lenders/ depositors. We further find that there is no allegation of assessing officer that any of such lenders/ creditors are part of syndicate of accommodation entry provider. There is no evidence that credit/ advance in the books of assessee was result of some circular transactions. Now again adverting to the primary submissions of ld AR for the assessee that the assessing officer in fact has not made any addition either on account of disallowance of sundry creditors or unsecured loan, in fact such observation was the basis of rejection of books of account. As we have noted that the ld CIT(A) clearly held that the basis of rejection of books of account was not justified. We find that books of account of assessee was duly audited and no reference or whisper about the audited books were made no adverse remarks was made by auditor of assessee. no specific defect was pointed in the books of assessee as required under section 145(3) of the Act, thus, such rejection lacks the statutory conditions, which we do not approve. Hence, we do not find any infirmity or illegality in the order passed by ld CIT(A), which we affirms, with our additional observations. Thus, in view of the aforesaid discussions, we do not find any merit in the ground No.1 to 3 of appeal raised by the revenue. Whether CIT(Appeals) has erred in not enhancing the assessmen by adding the unsecured loan and sundry creditor to the returned loss which the AO had disallowed and determined at Rs. NIL only? - HELD THAT:- The assessing officer filed three remand report and no such plea was raised nor any basis of such enhancement was raised. Moreover, the assessing officer himself accepted the transaction of sundry creditors and accepted the repayment in next assessment year in the assessment order passed under section 143(3). As recorded above the assessee also fully discharged its onus on unsecured loan. It is settled position under law that after passing the assessment order the assessing officer become functus officio and if any material or information comes to his notice subsequently, then he is required to follow the course of action prescribed under Income Tax Act and not otherwise. The assessing officer has neither initiated action under section 154 or 147, if he was of the view that assessment was required to be enhance or reopened, within the time period prescribed under Act. Even otherwise, we find that once, the contention of the assessee was accepted, after receiving remand report from assessing officer, and no such plea was raised by assessing officer, hence, there was no scope left for enhancement. Therefore, we do not find any merit in the ground of appeal raised by the revenue. In the result, the ground No. 4 of appeal raised by the Revenue is dismissed.
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