9911796707
TMI Blog2014 (12) TMI 1008X X X X Extracts X X X X X X X X Extracts X X X X ..... otal income at Rs. Nil. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) vide order dated 30.12.2009 and the total income was determined at Rs. 47,04,490/-. Aggrieved by the order of A.O., Assessee carried the matter before CIT(A) who vide order dated 13.09.2010 dismissed the appeal of the Assessee. Aggrieved by the aforesaid order of CIT(A) Assessee is now in appeal before us and has raised the following grounds;- 1. On the facts and in circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs. 1,90,323/- by treating alleged creditors as unverifiable creditors. 2. On the facts and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate amount of Rs. 1,90,323/- as unverifiable and has ceased to exist and accordingly made addition. With respect to amount payable to Bhikubhai Bhanjibhai Patel (Rs. 32,55,000/-), A.O noted that in response to summons u/s 131 of the Act, Bhikubhai Patel submitted that no transactions were made by him with the Assessee's in financial year 06-07, 07-08 & 09-10. A.O therefore concluded that Assessee did not have any liability towards Bhikubhai Bhanjibhai Patel and therefore the liability was non existing and therefore made addition of Rs. 32,55,000/-. With respect to the liabilities shown against Krishnadevi Batra (Rs. 5 lacs), Ashok Vedprakash Goyal (Rs. 1,59,000/-) & J.A. Zanuddin Rs. 3,75,000/-) aggregating to Rs. 10,34,166/-. A.O noted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herever replies were received, the same were duly considered by him. I also find that the above notices to the creditors were issued and sent on the addresses provided by the appellant. Therefore, when the final show cause dated 21.12.2009 was issued to the appellant, the burden was on the appellant to furnish and establish the genuineness of the outstanding liability in the name of the above creditors, and, as the appellant failed to furnish or establish genuineness of outstanding credits or the creditors wherever they remained unverified, the assessing officer, treated the same as unverified or ceased under section 41 (1) (a) of the act. 1, therefore, find that the assessing officer has made the addition after following the principles of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year relates to A.Y. 2007-08, that is relevant to F.Y. 2006-07 and the assessment has been completed on 30.12.2009. If this is accepted, it means the appellant is not aware of the whereabouts of its creditors to whom it had to make payment during the F.Y. 2006-07. This in turn also means the alleged creditors are also not interested in the recovery of their dues from the appellant, as they are not pursuing the same, which facts are enough to show that the liabilities to the above extent are no longer existing .The affidavit given by one the partners of the firm is also of no value vis-a-vis categorical denial made by Sh. Bhikubhai Bhanjibhai Patel that he does not have any amount outstanding against the appellant and he has no outstandi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid parties was claimed by the Assessee in earlier years and therefore no addition could have been made u/s 41(1). With respect to the Bhikubhai Patel, the ld. A.R. further submitted that in response to the summons issued u/s 131, Bhikubhai Patel had only submitted that there were no transaction by him with the Assessee for F.Y. 06-07, 07-08 & 09-10 but nowhere he had stated that no balance was outstanding in respect of Assessee. Ld. A.R. submitted that the A.O had not asked Bhikubhai as to whether any amount at all was receivable from Assessee. He further submitted that the balance payable to Bhikubhai Patel was brought forward from earlier years and for which he pointed to the balance sheet of the Assessee as on 31st March 2004 which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsaction with the Assessee's firm in F.Y. 06- 07,-07-08 & 09-10. On the other hand it is Assessee's submission that the amount was received in the year ending 31st March 2004. We find that there is no finding either by CIT(A) or by the A.O. that the Assessee had entered into transaction with Bhikubhai Patel in year ending 31st March 2004 and the nature of transaction. We therefore feel that this factual aspect needs fresh verification and for which we remit the matter back to the file of A.O so that he can examine the contentions of the Assessee that the amount was payable since year ending 2004. The A.O shall also make the necessary enquiries by summoning Shri Bhikubhai Patel and also affording opportunity of cross-examination to the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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