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2016 (4) TMI 504 - ITAT DELHI

2016 (4) TMI 504 - ITAT DELHI - TMI - Addition u/s 68 - Held that:- As find from the order of the ld CIT(A) that as regards to the identity, even permanent account number (PAN) or was balance sheet etc of the assessee were not provided. As regards to genuiness of the transaction, the same was in doubt from the observation of the AO that cash used to be withdrawn after deposit of cheque by the assessee. We find that no documents have been submitted by the assessee in support of the creditworthine .....

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in favour of assessee for statistical purpose. - ITA No. 1926/Del/2013 - Dated:- 4-3-2016 - SH. I.C. SUDHIR, JUDICIAL MEMBER AND SH. O.P. KANT, ACCOUNTANT MEMBER For The Appellant by Sh. Satyen Sethi, Adv. For The Respondent by Sh. A.K. Saroha, CIT(DR) ORDER PER O.P. KANT, A.M.: This appeal of the assessee is directed against the order dated 07.01.2013 of ld. Commissioner of Income Tax (Central), Gurgaon, raising sole ground of appeal, which is as under: That on the facts as well as in Law the .....

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and notice under Section 143(2) of the Income-tax Act, 1961 (for short the Act ) was issued. The Assessing Officer observed that the assessee company was engaged in manufacturing and trading of metal sheets in the previous year relevant to the assessment year. The Assessing Officer also observed that during the course of search and seizure action, the Director of the assessee company Sh. Radhey Shyam Gupta admitted undisclosed income in respect of the company of ₹ 7 crores related to the y .....

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, were found and seized. The ld. Assessing Officer was of the opinion that M/s. Shivalik Enterprises(HUF) who was appearing as creditors in the books of account of the assessee, had not supplied the goods to the assessee and it has provided only accommodation entries to the assessee. In the books of account of the assessee, a credit balance of ₹ 38,55,557/- was appearing in the name of M/s. Shivalik Enterprises(HUF). The assessee explained that the said party left some signed blank cheques .....

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f any documentary evidence provided by the assessee such as name of the representative of the creditors, the representative confirmation etc., the explanation given by the assessee that the representative along with the person of the company used to go to bank to withdraw the money from their accounts and utilized in Rewadi or elsewhere, was also found illogical by the Assessing Officer. The ld AO also noticed that as the creditor was located at Yamunanagar , how he felt the need of opening bank .....

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hdraw the money from the bank account, after deposit of cheque in the account of the creditor, which according to the AO was actually an accommodation entry. In view of the above facts, the Assessing Officer held that the credit of ₹ 38,55,557/- was unexplained and he added the same under Section 68 of the Act. Aggrieved, the assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) observed that the assessee failed to comply with three ingredients of Section 68 and the assessee faile .....

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given to their representative so that he may not be required to carry cash from one place to another. The learned AR made first proposition that the purchases in reference were made not in the assessment year under consideration and hence no addition could be made in the year under consideration. The ld. Authorized Representative relying on page one of the paper book submitted that in the assessment year 2009-10, the assessee purchased copper scrap of ₹ 1,12,65,189/- from M/s. Shivalik Ent .....

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om 01.04.2009 and it has represented the purchases made in assessment years 2009-10 and, therefore, no addition could be made in assessment year 2010-11. second proposition submitted by ld. Authorized Representative that the Assessing Officer has accepted the purchases from M/s. Shivalik Enterprises (HUF) except for the outstanding amount of ₹ 38,55,557/- and thus, the remaining purchases of ₹ 2,97,13,600/- was accepted. Therefore, it cannot be accepted that the purchases were not ge .....

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Pancham Dass Jain 156 Taxman 507. In fourth proposition, as regard to the ingredients of Section 68, ld. Authorized Representative submitted that the party existed as the identity of party was not doubted by the Assessing Officer and the transactions were also genuine as the same were got verified by the Inspector of the Office of the Assessing Officer and the creditworthiness also cannot be doubted as for the invoices were tax paid and material purchased was accounted for in the excise records .....

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o the second proposition, ld CIT(DR) submitted that the facts and circumstances proved that M/s. Shivalik Enterprises (HUF) was mere an accommodation entry provider and other purchases from the said have not been held as non genuine, then the matter may be restored to the Assessing Officer for disallowing other purchases from the said parity. As regards to the case of CIT Vs Panchamdas (supra) relied upon by the ld AR, the Ld CIT DR submitted that facts of the said case were different from the f .....

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discharged its Burdon of proof regarding identity of the creditor, genuineness of the transaction and creditworthiness of the creditor, however, the ld CIT DR has disputed this statement of the ld AR. We find from the order of the ld CIT(A) that as regards to the identity, even permanent account number (PAN) or was balance sheet etc of the assessee were not provided. As regards to genuiness of the transaction, , the same was in doubt from the observation of the AO that cash used to be withdrawn .....

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editor. Accordingly, we restore the matter to the file of the Assessing Officer for deciding the issue afresh in accordance to law. Needless to mention that the assessee shall be provided sufficient opportunity of being heard. As regards to the third proposition of the ld AR that the provision of section 68 of the Act are not applicable over the purchases, in view of the judgement of the CIT Vs Panchamdas Jain (supra) , is concerned , we find that the fact in the case of CIT Vs Panchamdas Jain ( .....

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