TMI Blog2013 (2) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... Gehlot Shri Bhavnesh Saini, JJ. For The Appellant : Shri Waseem Arshad For The Respondent : Shri Gaurv Goyal JUDGMENT : Per A.L. Gehlot, Accountant Member: These are appeals filed by the Revenue against two different orders, both dated 09.03.2012, passed by the ld. CIT(A), Ghaziabad for the Assessment Years 2006-07 2008-09. 2. Common grounds have been raised by the Revenue in both the appeals based on identical set of facts. Therefore, for the sake of convenience, both the appeals are decided by this consolidated order. 3. Ld. Representatives of the parties submitted that the facts lead in A.Y. 2006- 07, therefore, the effective grounds raised in ITA No.211/Agr/2012 for A.Y. 2006- 07 are reproduced as under :- 1. That the Ld. CIT(A) has erred in law and on facts in allowing relief of ₹ 45,46,166/- on account of disallowance of expenses though the assessee had failed to produce books of account and prove the genuineness of expenses claimed at a time of assessment. Therefore, the expenses remained unexplained and A.O. rightly disallowed @ 50% of total expenses. 2. That the Ld. CIT(A) has erred in law and on facts in restricti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of assessment proceedings and now the books of accounts have been rejected under section 145(3) of the Income Tax Act hence sundry creditors amounting to ₹ 1,26,51,811/- are not reliable on the basis of above mentioned judicial pronouncement on which I am relying. Therefore sundry creditors amounting to ₹ 1,26,51,811/- is being taken as income of the assessee and added back to the income of the assessee being unexplained. 7. The CIT(A) restricted the disallowance to the extent of ₹ 5,00,000/- and deleted the addition of ₹ 45,46,166/- as under :- (Page nos.36 37) During the remand proceedings AO has categorically recording a finding that assessee produced the book of accounts including ledger and cash book along with original vouchers, bank statement etc. which are examined by him on test basis. Some expenses are found to be incurred in cash and in some cases vouchers are not signed by recipient. After considering this report it is nobody s case that book of accounts are not produced or not examined. Payment in cash can not be faulted with, if supported by vouchers. Few supports on letter head etc. is also justified. Though un- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of the creditors are not assessed to tax but no addition can be sustained on that ground, as the reason for addition was production of creditors only and beside there are ample of evidences in support of credit balances. AO also has not found any evidence against the assessee even after examining bank statements, purchase bills etc. Thus, except for a sum of ₹ 40,998/- total addition of ₹ 1,26,10,813/- is deleted. However in case of doubt about the creditors who are not assessed to tax AO is free to take action against the said creditors. (Relief of ₹ 1,25,69,815/-) 9. Ld. Departmental Representative submitted that on one hand the CIT(A) sustained ₹ 5,00,000/- and on the other hand held that books of account was wrongly rejected by the A.O. Ld. Departmental Representative submitted that the disallowance was made by the A.O. as the assessee has failed to produce the books of account and to prove the genuineness of the expenditure at the time of assessment proceedings. Ld. Departmental Representative filed copy of remand repot and submitted that the assessee did not produce books of account and other details before the A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on filed during original assessment u/s 143(3) dt.26.12.2007 showing details of sundry creditors Pg.No. 12 4. Copy of written submission filed during original assessment u/s 143(3) dt.12.03.08 along with list of Sundry Creditors as on dt. 31.03.2006. Pg.No. 79 80 5. Copy of confirmations from Sundry Creditors Pg.No. 81 91 6. Copy of Order u/s 143(3) mentioning production of Books of A/c s for kind perusal. Pg.No.94 7. Copy of written submission filed during subsequent assessment u/s 143(3) dt. 14.12.2010 along with list of Sundry Creditors with their address as on dt. 31.03.2006. Pg.No. 107 108 8. Copy of Statement Recorded on Oath of Sundry Creditors Pg.No. 109 118 Copy of Confirmation Copy of Statement Recorded on Oath Pg. No.81 Pg. No.109 Copy of Confirmation Copy of Statement Recorded on Oath Pg. No.82 Pg. No.118 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also and the A.O. has filed the remand report. Copy of remand report filed by the A.O. has also been furnished by the ld. Departmental Representative before us. The CIT(A) before coming to the conclusion considered the remand report of the A.O. We find that the CIT(A), after a detailed discussion on each and every aspect of the matter including the claim of expenditure and after examining the details filed by the assessee in respect of expenditure, came to a reasonable conclusion and addition to the extent of ₹ 5,00,000/- has been sustained for want of verification of expenditure and others and has rightly allowed relief of ₹ 45,46,166/- as sustaining 50% of expenses and running a business with remaining 50% expenses is impossible. The view taken by the CIT(A) appears to be fair and reasonable. We, therefore, confirm the order of CIT(A) in respect of disallowance of expenses. 12. As regards the addition on account of creditors, we find that the A.O. himself has accepted the document filed by the assessee containing copy of bank statement and confirmation and the A.O. did not doubt about the genuineness of those parties. The A.O. himself recorded the fact in the reman ..... X X X X Extracts X X X X X X X X Extracts X X X X
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