TMI Blog2015 (7) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... and also opining that the assessing officer may call upon the assessee to adduce evidence in the form of producing such parties. For the assessment year 2004-05 the matter was restored back to the file of assessing officer in respect of addition representing the closing balance of fifteen creditors with the liberty being granted to the assessee as well as assessing officer as granted for the assessment year 2003-04. Unapproved sundry creditors - Whether the Tribunal was justified in law in holding that the provisions of Section 69C of the Act would also apply when the expenses incurred towards purchases were not disputed and the payments made were also recorded in the books of accounts? - Held that:- The order of the assessing officer do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 68 of the Act came to be set aside and the matter has been remitted to the assessing officer to examine the addition representing the closing balance of 15 creditors on confirmations being filed by the assessee and to pass orders thereunder. 2. This court by order dated 18.12.2009 has admitted the appeal to consider the following substantial questions of law: (1) Whether the Tribunal was justified in law in upholding the application of section 68 in respect of trade credits outstanding at the end of the year on account of purchases, when the purchases have not been disputed and the trading results have been fully accepted and also the outstanding credits have been confirmed by the parties who were paid in full after the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing aggrieved by these assessment orders, assessee preferred appeals before CIT(A). For the assessment year 2003-04 CIT(A) deleted entire addition made by the assessing officer except for ₹ 6,00,000/- pertaining two sundry creditors and for the assessment year 2004-05 the entire addition made by the assessing officer was deleted by order dated 18.12.2007. 7. The revenue being aggrieved by these orders filed an appeal before the Income Tax Appellate Tribunal (for short Rs.ITAT') contending that the addition made by the assessing officer under section 68 of the Act ought not have been deleted by the appellate authority. The assessee preferred cross objections supporting the order of CIT(A) and contending that the deletion was bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 81,91,755.80 towards sundry creditors in the Balance Sheet. Hence, communication was forwarded to those sundry creditors under section 133(6) of the Act by the assessing officer calling upon them to either furnish the copy of the accounts for the financial year 2002-03 as appearing in their books or to confirm the amount outstanding. Some of the creditors denied the business transaction of the assessee and some letters addressed to the creditors were received back unserved. Hence, the assessing officer extended an opportunity to the assessee to prove the sundry creditors by producing the relevant material. Despite offering opportunity the same was not proved. Hence, summons under section 131 came to be issued to the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 28.12.2006 came to be deleted in its entirety by the CIT(A) on the ground that the assessing officer has neither disputed the purchases nor sales amongst other grounds as indicated in the order dated 18.12.2007. The ITAT vide paragraph 4.3 has remitted the matter back to the assessing officer as already noted hereinabove. 11. It is the contention of Sri.Gurunathan, learned counsel appearing for the assessee that assessee has discharged the initial burden and if the revenue disbelieved the confirmation on account of some valid reason, the burden was on the revenue to issue commission and make further enquiries to satisfy itself about the claim. He would elaborate his submission by contending that tribunal erred in holding Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected in the balance sheet of the assessee was not proved by the assessee though sufficient opportunity was granted. The order of the assessing officer does not indicate about any explanation having called for by the assessing officer from the assessee and such explanation having been not accepted so as to treat the same as income of the assessee for such financial year. However it requires to be noticed from the order of the tribunal that after analyzing the case laws it has been held that section 68 read with section 69C can be invoked in respect of sundry creditors which are not proved by the assessee before the assessing officer. As such we are of the considered view that the principles contained in section 68 as well as section 69C wou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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