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DCIT, CIRCLE 29 (1) , NEW DELHI Versus SH. VIJAY KUMAR AHUJA

2016 (6) TMI 935 - ITAT DELHI

Penalty u/s. 271(1)(c) - unexplained creditors - Held that:- As the addition on which the penalty in dispute was levied, which has been deleted by the ITAT [2013 (9) TMI 8 - ITAT DELHI ] , therefore, the penalty in dispute will not survive. Therefore, Ld. CIT(A) has rightly deleted the penalty in dispute. - Decided in favour of assessee - I.T.A. No. 6579/DEL/2013 - Dated:- 2-6-2016 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER For The Department : Sh. Amit Jain, Sr. DR .....

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genuineness of the creditors. 2. The facts narrated by the Revenue Authorities are not disputed by both the parties, therefore, the same are not repeated here for the sake of convenience. 3. Ld. DR relied upon the order of the AO and reiterated the contentions raised in the grounds of appeal. 4. At the time of hearing, Ld. Counsel of the Assessee Sh. Ashish Chadha, Advocate stated that the quantum on which the penalty has been imposed, has already been deleted by the ITAT. Ld. CIT(A) by followin .....

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vide para no. 11 to 16 at pages 6 to 9 and deleted the addition in this regard. The Tribunal has held as under:- 11. With regard to this issue, having heard the rival contentions and having perused the relevant material placed on record, we find that undisputedly, the amounts in question are outstanding as sundry creditors for the last three years. This is evident from the ledger accounts of the creditors, as placed in the paper book at pages 44-57. As such, there is no infirmity in the stand t .....

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is also apparent that the above four parties would have squared off or written off the balances in the name of the assessee and, as such, there is a remission or cessation of the liability of the assessee…….. 12. However, since undisputedly, the amounts are still outstanding, it cannot be said that they have been either written off or squared off or that any benefit has been derived by the assessee. For doing so, the provisions of Section 41 (1) of the Act are also not attracted a .....

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fficer. Therefore, just because confirmations were not filed, according to YFC Projects (P) Ltd. vs. DCIT , 134 TTJ 167 (Del), no addition can be made. Further, to support the proposition that amounts representing purchases made on credit do not attract the provisions of Section 68 of the Act, ACIT vs. Han Singer Gutkha (P) Ltd. , 9 DTR (Luc) (Trib.) 604 has rightly been relied on. Then, as observed, since the purchases have been accepted as genuine, balances remaining outstanding at the end of .....

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that Section 68 of the Act gives a discretion of the Assessing Officer in this regard; and that the Assessing Officer has to take into account the overall facts. In the present case, as discussed, on considering the facts of the case, the provisions of Section 68 of the Act are not attracted and considering the overall facts, no addition is called for under the Section. 13. Further, as considered in the order dated 30.09.2011 passed by this Bench (authored by the JM) in the case of M/s Divine I .....

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he year itself. If this is so, the onus will be on the department to establish that assessee has made payment to these creditors. This is not even the allegation of the assessing officer, much less his case against the assessee. The third allegation can be that these credits do not represent the purchases which have been made by the assessee. The implication of this will be that the purchases debited in the trading account are not genuine to that extent and accordingly, that the trading account .....

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further, evidently, it was not scrutiny assessments for Assessment Years 2007-08 and 2008-09, that u/s 143 (3) of the Act, these creditors were accepted by the department. Therefore, the facts and circumstances for the year under consideration remaining entirely unchanged, consistency is required to be maintained for the year under consideration also. 16. For the above discussion, finding the grievance sought to be raised by the assessee in this regard to be justified, we accept the same. Accord .....

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