TMI Blog2016 (2) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. - Decided against revenue Addition on account of sundry creditors - CIT(A) deleted the addition - Held that:- We find that the AO added the entire amount of Sundry Creditors on the ground that the assessee did not furnish the names and addresses of the Sundry Creditors and, therefore, the necessary verification could not be carried out. However, the ld. CIT(A) observed the necessary details, had been filed by the assessee vide letter dated 16.11.2011 in paragraph 4 & 5 whereby the party- wise sundry creditors and also the details of all the purchases above ₹ 50,000/- were furnished with the names and addresses. The ld. CIT(A) further observed that most of these creditors were paid in the subsequent years on the basis of confirmations and copies of accounts for the subsequent years and thus, deleted the addition. From the facts of the case and on the basis of records and arguments of the ld. Counsel, we find that the AO made an addition without examining the details and information available before him and made the addition without application of mind to the facts and information before him. We do not find any infirmity in the order of CIT(A) on this point and uphold th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The Ld. CIT(A) erred in deleting the addition made on account of interest paid on unsercured loan of ₹ 2,84,304/-. For reasonableness stating that the AO did not take cognizance of the complete details available in the shape of ledger account of interest paid and the details submitted as audit report. 2. Ground no. 1 relates to deletion of addition of ₹ 6,02,995/- being 20% of labour charges of ₹ 30,12,975/-. 2.1. Brief facts of the case are that the assessee filed its return of income on 30.09.2009 declaring total income of ₹ 43,79,734/-. The assessee firm is engaged in the manufacturing of P.P Caps. During the course of scrutiny proceedings, the AO noticed that the assessee had charged to the profit and loss account ₹ 30,12,975/- under the head labour processing charges and required the assessee to furnish the labour register, name of complete address of the persons to whom the payments were made along with bills and vouchers. The assessee submitted only ledger copies and the AO disallowed 20% of the total labour and processing charges amounting to ₹ 6,02,595/-. Ld. CIT(A) deleted the addition by observing that the assessee subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he return of TDS were filed and, therefore, we uphold the order of CIT(A) on this point by dismissing the appeal of the revenue on this point. The AO is directed accordingly. 3. Ground no. 2 relates to deletion of addition made by the AO on account of sundry creditors of ₹ 17,17,247/-. Brief facts of the case are that the assessee s balance-sheet contained ₹ 17,17,247/- as sundry creditor outstanding as on 31.03.2009. The AO asked the assessee to furnish the details of names, addresses, confirmations and analysis of the sundry creditors. The AO added the entire amount of sundry creditors to the income of the assessee on the ground that assessee did not furnish the names and addresses and supporting bills of these creditors to the income of the assesse and, therefore, the necessary enquiry u/s 133(6) or summon u/s 131 could not be issued. The CIT(A) deleted the addition of ₹ 17,17,247/- by observing that the basis of AO to add sundry creditor was incorrect and AO failed to consider the submissions of the assessee filed during the assessment proceedings vide letter dated 16.11.2011 which was also acknowledged by the AO and referred in the Assessment Order wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO made an addition without examining the details and information available before him and made the addition without application of mind to the facts and information before him. We do not find any infirmity in the order of CIT(A) on this point and uphold the same by dismissing the appeal of the revenue. The AO is directed accordingly. 4. The ground number 3 4 relates to deleting the addition u/s.68 of the Act as unexplained cash credits for unsecured loans of ₹ 22,70,086/- and interest paid on unsecured loan of ₹ 2,84,304/-. The brief facts are that the assessee borrowed ₹ 22,70,086/- from the friends and relatives in the earlier years on which interest of ₹ 2,84,304/- was provided for during the year. The ld. AO treated the entire amount of unsecured loan of ₹ 22,70,086/- as unexplained cash credit u/s 68 of the Act and also disallowed the interest paid on these loans amounting to ₹ 2,84,304/- on the ground that the assessee did not furnish the details of these creditors and also the interest was paid to the friends and relatives which were covered u/s 40A(2)(b). The ld.CIT(A) deleted the disallowance by observing in paragraph no. 7.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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