TMI Blog2013 (5) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... inding and having regard to the judgment by the hon'ble Delhi High Court in the case of CIT v. Ashish Rajpal [2009 (5) TMI 18 - DELHI HIGH COURT] are set aside the order on these issues. - Decided in favour of assesse. Outstanding credit of ₹ 10.96 lakhs - Held that:- It is admitted that the appellant has placed on record confirmations in assessment proceedings before the Assessing Officer. The learned Assessing Officer did not make any enquiry thereon and accepted the fact on its face value. This was to be termed as a case of only half-hearted enquiry as no definite conclusion could be arrived merely on the filing of confirmation before the Assessing Officer. The learned Commissioner of Income-tax in the present case only gave direction to decide afresh. Such a direction does not cause prejudice to the assessee as has also been held by the hon'ble Madhya Pradesh High Court in the case of CIT v. Deepak Kumar Garg [2007 (5) TMI 186 - MADHYA PRADESH HIGH COURT ]. The learned Commissioner of Income-tax, therefore, is found justified in setting aside the order of the Assessing Officer to be erroneous in so far as it is prejudicial to the interests of the Revenue on this issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer has also not examined this case properly nor collected the details. (ii) No details of TDS reconciliation vis-a-vis commission (adat) receipt is available on records. The Assessing Officer failed to collect the details or they were not furnished by you. (iii) You have claimed loss in trading account in various agriculture items. However, the Assessing Officer has not examined the reasonableness and genuineness of this claim as the record is silent in this regard. 3. The assessee furnished reply, which was duly considered and the assessment was found erroneous in so far as it is prejudicial to the interests of the Revenue on the following grounds : (A) The first point involved is the non-verification of the genuineness of the assessee' s claim that there are outstanding sundry creditors of an amount of ₹ 10.96 lakhs at the end of the year 2006-07. Besides this, as per the balance sheet, sundry debtors of ₹ 33,55,662 are appearing and on perusal of interest account, it is gathered that the amount of ₹ 57,795 has been credited which includes ₹ 25,000 as interest from bank. Thus, the remaining amount of ₹ 33,795 has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditors/debtors have not at all been verified by the Assessing Officer regarding their identity and genuineness of transactions and thus the Assessing Officer has erred in accepting the huge sundry creditors/debtors without examining their identity and the genuineness of transactions with them. Hence the order passed by the Assessing Officer is erroneous in law as well as on facts. As far as the requirement of order being prejudicial to the interests of the Revenue is concerned, if the amounts shown as sundry debtors/creditors are not verifiable they become part of the taxable income of the assessee as unexplained creditors and bogus debtors and hence the interests of the Revenue is certainly prejudicially affected. Both the conditions are fulfilled in the present case. (D) Therefore, the assessment order dated March 18, 2009 is set aside to be made afresh after following and directions given above and properly verifying the identity and genuineness of the transactions in regard to sun dry creditors (farmers) of ₹ 35,27,224 and sundry debtors (farmers) of ₹ 33,55,662 and the claims of interest charged from some of the debtors (of ₹ 33,795) and also if no inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be erroneous and prejudicial to the interests of the Revenue on this issue as well because the Assessing Officer has not examined the claim of loss in trading account claimed by the assessee on the various items traded by it, which was disallowable if not explained. 4. The assessee' s counsel making reference to show-cause notice dated January 11, 2012, and to the written submissions laid on record at pages 14 to 16 contains that the replies were given to the Assessing Officer on each and every issue. All the issues are stated to have been enquired by the assessing authority. It has, therefore, been contended that the order passed after making enquiry cannot be termed erroneous. That apart it has been contended that in the show-cause notice, the learned Commissioner of Income-tax merely sought to explain the difference of interest of ₹ 32,795 (on the amount of debtors/farmers for ₹ 33,55,662), as to whether the same was accounted for in the books of account of the assessee or not, but the learned Commissioner of Income-tax travelled beyond the show-cause notice and directed enquiry afresh to verify the genuineness of such debtors and transactions with them. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant has placed on record confirmations in assessment proceedings before the Assessing Officer. The learned Assessing Officer did not make any enquiry thereon and accepted the fact on its face value. This was to be termed as a case of only half-hearted enquiry as no definite conclusion could be arrived merely on the filing of confirmation before the Assessing Officer. This finds support from the judgment rendered by the hon'ble Calcutta High Court in the case of Hindusthan Tea Trading Co. Ltd. v. CIT [2003] 263 ITR 289 (Cal) pages 299 and 300 as under : But when the Income-tax file numbers were disclosed, even though despite service of notices, the 14 persons failed to respond, it was incumbent on the Income-tax authority to ascertain from the Income-tax file numbers whether the files were in existence and on the basis of such files the identity of the shareholders could be established or not and their creditworthiness and genuineness of the transaction could be proved. Until such enquiry was made, it cannot be said that the Income-tax authority had acted upon the materials so disclosed. The onus may not be discharged simply on production of the materials ..... 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