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2022 (8) TMI 899 - AT - Income TaxAddition u/s 41(1) - cessation of liability - assessee has not been able to produce confirmation for sundry creditors outstanding - HELD THAT:- Deficiencies marked by the AO are not sustainable (i) As assessee had filed confirmations of sundry creditors for purchases (ii) Discrepancies in the opening balance as per balance-sheet and submissions made by the assessee has been duly reconciled and filed before the CIT(A) and we have also considered the same and found to be correct (iii) As per AO balance-sheet of the assessee does not reflect a true and fair view of its affairs is not sustainable as she did not rejected the books of accounts, hence, this finding of her is contradictory and not sustainable and (iv) Notices issued under section 133(6) of the Act were responded by the parties before the CIT(A) and on this aspect, Ld. CIT(A) asked for a remand report from AO, hence, this allegation is also not sustainable. Submissions of the assessee and additional evidences filed before Ld. CIT (A) and accepted by him considering the remand report of A.O., we are of the considered view that order of A.O. was not sustainable and findings of Ld. CIT (A). Addition as cash receipts and cash payment - HELD THAT:- We have gone through the form no 3CD (Tax Audit Report) and submissions before the authorities below made by the assessee. We found the tax auditor reported these two items of cash receipt and cash payment shown under the column of loan and deposits accepted during the year and not under the column for disallowances to be made u/s 40A(3). These two transactions are in the nature of amounts taken / paid in cash from sister /associate concerns. As assessee has not claimed amount of Rs. 19,50,000/- and Rs. 56,00,000/- as expense in its Profit & Loss A/c, therefore, it cannot be disallowed. Looking at the nature of transactions it is no-where proved that the same can be treated as income u/s 28 or can be disallowed u/s 40A(3) or any other section of the act. At the max both the transactions can be considered for the purposes of section 269SS and section 269T, subject to the clarification of the assessee and various judicial pronouncement in this regard. Hence, we hereby direct to delete addition/disallowance of Rs 75,50,000/- made by A.O. and sustained by Ld. CIT (A). Applicability of sections 269SS, 269T r.w.s. 271D and 271E are concerned as no action so far has been taken against the assessee by the A.O. in the result there is no cause of grievance made out by the assessee on which this tribunal can adjudicate hence, challenging the initiation itself is not allowed hence, found to be infructuous.
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