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2023 (10) TMI 1014 - ITAT DELHIAddition of sundry creditor - whether CIT(A) erred deleting addition merely accepting the contention of the assessee without conducting independent enquiry? - HELD THAT:- CIT(A) rightly observed that the assessee had presented credible evidence regarding the source of loan by filing copies of PAN, ITR, bank statement and ledger of creditors, therefore, the identity and creditworthiness could not be alleged as doubtful. Regarding Amit Gaur (HUF) there was bank balance and current year’s income similar in the case of creditors Surender Kr. Garg (HUF) there was sufficient balance in his account. Likewise, in the case of Smt Indravati Devi, Nisha Agarwal, Ruby Goel and Santosh Goel the loans were advance mainly on account of interest on old loans paid by the assessee and the same interest was re-invested with the assessee for earning interest income. Therefore, factual finding recorded by the ld CIT(A) do not require any interference as the reinvestment of interest received by creditors goes to show that the creditworthiness of the creditors is not in doubt and same cannot be doubted without any adverse positive material. CIT(A) rightly noted that it is not the case of AO that the old balances standing in the names of the creditors were money belonging to the assessee. Ground No. 1 of revenue is dismissed. Unexplained interest expenses paid to sundry creditors - HELD THAT:- CIT(A) has granted relief to the assessee by observing that the AO has no facts in record to show that opening loans from creditors were bogus therefore, the addition on account of new loan has also been deleted. Consequently, the disallowance of interest payment cannot be sustained. We are unable to see any valid reason to interfere with the conclusion drawn by the ld CIT(A) in deleting the interest payment to the creditors. Rejection of books of accounts - Estimation of GP - HELD THAT:- We note that the AO mentioned major expenses like electricity, job work and bank charges have increased. CIT(A) further noted that if there was doubt in his mind of AO regarding such expenses then he should have make some basic enquiry before resorting to drastic step of rejecting the books of account. The ld CIT(A) further observed that unless the AO on facts showing incorrect disclosure of receipts and bogus claim of expenses or inconsistencies in accounts maintained by the assessee then rejection of books of account cannot be held sustainable and valid. With these observations the ld CIT(A) deleted the addition made by the AO on account of GP rate. In our considered opinion the AO rejected the books of account of assessee without having any valid basis and the conclusion drawn by the AO so set aside by the CIT(A) on the strength well accepted principles of tax jurisprudence pertaining to the rejection of books of account. Thus, we are unable to see any valid reason to interfere with the finding arrived by the ld CIT(A) and hence we uphold the same. Appeal of revenue is dismissed.
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