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2016 (1) TMI 531 - ITAT DELHI

2016 (1) TMI 531 - ITAT DELHI - TMI - Addition on account of 'Sundry creditors’ - CIT(A) deleted the addition - Held that:- The three persons who were examined by the AO duly admitted that they had sold their jewellery to the assessee. The AO has doubted the genuineness of transactions with them by holding that they were persons of no means. When we peruse the details of amounts appearing against these persons, it is found that the same ranged between ₹ 1 lac to ₹ 2 lac. The fact tha .....

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r consideration, we are of the considered opinion that the ld. CIT(A) was justified in deleting this addition. - Decided in favour of assessee.

Addition on account of unsecured loans - CIT(A) deleted the addition - Held that:- There cannot be any addition under section 68 in respect of brought forward balances. Section 68 contemplates the addition in respect of amounts received during the year which are not properly explained by the assessee to the satisfaction of the AO. Here is a ca .....

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he impugned order and send the matter back to the file of AO for deciding this issue afresh as per law, after allowing a reasonable opportunity of being heard to the assessee. In case it is found that unsecured loans amounting to ₹ 11,14,926/- were brought forward balances from the last year, then, no addition should be made for this amount in the current year. In the otherwise situation, the AO is free to examine the genuineness of these credits as per law. While examining this issue of t .....

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etails to whom salary payments were made and also payment to ‘karigars.’ The assessee expressed inability to produce these persons because the business itself was closed down on 27.7.2009 and, thereafter, it was difficult to locate them. In our considered opinion, the amount of salary paid to the assessee’s employees and charges to outside ‘karigars’ is reasonable in the facts and circumstances of the instant case as the further corroboration by producing them for personal examination was not po .....

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Barnwal, Sr. DR For The Respondent : Shri K. Sampath, Advocate ORDER PER R.S. SYAL, AM: This appeal by the Revenue is directed against the order passed by the CIT(A) on 18.04.2011 in relation to the assessment year 2008-09. 2. The first ground is against the deletion of addition of ₹ 40,25,234/- made by the AO on account of Sundry creditors . 3. Briefly stated, the facts of the case are that the assessee is engaged in the business of purchase and sale of gold jewellery. Sundry creditors t .....

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ellers House, from whom the payment was stuck up. The assessee submitted that the amount was received from M/s Nikki Jewellers House and then paid to these customers in the immediately succeeding year. The AO has recorded that despite giving adequate opportunity to produce these creditors, the assessee could produce only three persons, namely, Smt. Murti Devi, Smt. Joginder Kaur and Shri Satpal, whose statements were recorded on different dates. The AO noticed that they were persons of no means .....

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see immediately settled the accounts of these customers. The ld. CIT(A) has recorded that all the sundry creditors were produced before the AO on 7.10.2010, but, they were sent back by the Officer on the pretext that his health did not permit to take statement of more than two persons in a single day. Shri Darshan Singh, husband of the assessee stated these facts on affidavit before the ld. first appellate authority. A copy of such affidavit is available on record which divulges that all the cre .....

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against these persons, it is found that the same ranged between ₹ 1 lac to ₹ 2 lac. The fact that confirmation from all the creditors were filed along with the affidavit filed by the assessee s husband averring their production before the AO who refused to examine and other attending circumstances go to prove the genuineness of the transactions of purchase of gold jewellery by the assessee from them. Immediate payment could not be made to these persons because the receipt from M/s N .....

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.19 lac from friends and relatives. On being called upon to produce these persons, the assessee submitted that a sum of ₹ 11,14,926/- represented brought forward unsecured loans and only a sum of ₹ 3,04,270/- was on account of transaction undertaken during the year with Smt. Amarjeet Kaur, who sold jewellery to the assessee for which confirmation was filed. The AO observed that in the return of income for the A.Y. 2007-08, there was no balance of unsecured loans. He, therefore, made .....

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₹ 11.14 lac represented brought forward balances, but, the AO did not find any closing balances of unsecured loans in the return for the immediately preceding year. The ld. AR did not readily have the balance sheet of the preceding year to amplify his contention about such brought forward balances. In our considered opinion, this fact is of utmost importance which requires examination at the AO s end. We, therefore, set aside the impugned order and send the matter back to the file of AO fo .....

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ntention about the sale of jewellery by Smt. Amarjeet Kaur during the year for a sum of ₹ 3.04 lac. This ground is, therefore, allowed for statistical purposes. 7. The last effective ground is against the deletion of addition of ₹ 3 lac on account of excessive salary paid to employees and ₹ 63,000/- on account of salary payable for the month of March, 2008. The assessee debited a sum of ₹ 7,56,000/- as salary paid to the persons whose names have been incorporated on page .....

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