TMI Blog2010 (3) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... preliminary hearing, after due consideration of rival submissions, the Misc. Petition was admitted for regular hearing. 4. The back-ground of the issue, briefly, is that the assessee was a dealer in rice. For the AY under dispute, the AO had originally made an addition of ₹ 5.04 lakhs u/s 68 of the Act on the ground that the assessee had failed to produce the creditors for verification. On appeal, the CIT(A) had sustained the addition. On a further appeal, the Hon ble Tribunal vide its order in ITA No.2079/04 dt: 15.9.06 conceded to the assessee s plea if an opportunity was given, the trade creditors could be produced before the AO and, accordingly, remitted back the issue on the file of AO for fresh consideration. 5. In the reassessment proceedings, the assessee had produced only two trade creditors and after due examination of the said traders, the AO was of the opinion that both of them have failed to prove the genuineness of transactions as well their worthiness and that even after affording sufficient opportunities, the assessee had perhaps pleaded his inability to produce the other alleged trade creditors as promised and, thus, the AO retained the addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing case laws: (i) S.Hastimal v. CIT, Madras (1963) XLIX ITR 273 (Mad); (ii) CIT v. Pancham Dass Jain (2006) 205 CTR (All) 444; (iii) CIT v. Smt.Sita Devi Juneja (2010) 187 Taxman 96 (Punj. Har.) (iv) CIT v. Jaipur Jewellers (Exports) (2010) 187 Taxman 169 (Del) 7.1. On her part, the Ld. D R came up with a spirited argument that the assessee had been given sufficient opportunities to have his say, in stead of grabbing of those opportunities, he has been dragging on the issue with one pretext or another and, thus, he should have no grievance to put it across a plea that he has been deprived of providing of an opportunity of being heard. As a matter of fact, the Ld. D R submitted, the Hon ble Tribunal was pleased, not once, but, twice to take a lenient view, by affording reasonable opportunity to prove the genuineness of the transaction as well as the credit worthiness of the alleged trade creditors. In stead of clearing the air of suspicion, the assessee has been dillydallying with the issue on one pretext or the other. It was, therefore, pleaded that the earlier order of the Hon ble Tribunal requires no interference and, thus, the Misc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. CIT (A) observed thus (On page 4) As regards the balance creditors, it is noted that it was the appellant who had requested for opportunity before the ITAT to produce the trade creditors and it was for this reason only that the issue was restored afresh to the AO. The decision cited by the AR will not apply as the appellant has not given the present whereabouts of these creditors and is himself admitting that many of them are not available or not remembering the transaction. The failure of the appellant now to produce the trade creditors can only lead to an adverse inference that these credits are not genuine 8.1.4. The sequence of events as brought out in the fore-going paragraphs explicitly prove beyond any iota of doubt that the assessee has been given ample opportunities to come up clean, however, the assessee, has been - to put it gently pampered with a theory that he has been given no sufficient opportunity to prove the genuineness of his trade creditors. 8.1.5. Let us now analyze the legal pronouncements on which either party having been banking on. Case laws on which the assessee has been hankering on his stance: (i) S.Hastimal v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm view, come to the rescue of the assessee. (iv) Similarly, the issue before the Hon ble High Court of Delhi in the case of CIT V. Jaipur Jewellers (Exports) referred supra was remission or cessation of trading liability u/s 41(1) of the Act. What is rather intriguing our mind is how the above referred case will be of any help to the facts of the issue on hand? 8.1.6. The following case laws on which the Revenue had pondered with in its favour: (i) the Hon ble High Court in the case of V.I.S.P (P) Ltd. v. CIT Anr. (2004) 265 ITR 202, has ruled that since the AO found the whole transaction of alleged purchase by the assessee to be bogus and the entry made in the trade account as a liability was only a paper entry, the contention that s. 68 can be invoked only when the books of account of the assessee show cash entry and not otherwise cannot be accepted. If the liability shown in an account is found to be bogus and there is no plausible and reasonable explanation of the assessee, the amount can certainly be added towards the income of the assessee. (ii) Similarly, in the case of Uplaksh Metal Industries v. CIT (2009) 177 Taxman 298, the Hon ble P H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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