TMI Blog2017 (3) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... not brought any details of the specified person as required under the provisions of law. In view of above we reverse the order of lower authorities and thus the ground of appeal of the assessee is allowed. - I .T.A. No.954/Kol /2015 - - - Dated:- 17-3-2017 - Shri Waseem Ahmed, Accountant Member and Shri S.S.Viswanethra Ravi, Judicial Member For The Appellant : Shri Nilratan Dutta, FCA For The Respondent : Shri Rajat Kr.Kureel, JCIT ORDER Per Waseem Ahmed, AM This appeal by the assessee is against the order of Commissioner of Income Tax (Appeals)-11, Kolkata dated 14.05.2015. Assessment was framed by A.C.I.T., Circle-39, Kolkata u/s 143(3) of the Income tax Act, 1961 (hereinafter referred to as the Act ) vide his order dated 21.12.2011 for assessment year 2009-10. Shri Nilratan Dutta, Ld. Authorized Representative appeared on behalf of assessee and Shri Rajat Kumar Kureel, Ld. Departmental Representative represented on behalf of Revenue. 2. The first issue raised by the assessee in this appeal is that the ld. CIT(A) erred in confirming the order of AO by sustaining the disallowance of ₹ 3,18,694/- on account of difference in the closing balan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit allowed by the creditor]. In view of the above, the addition of ₹ 3,18,694/- is confirmed and the ground of appeal No.2 is dismissed. Being aggrieved by the order of ld. CIT(A) the assessee is in second appeal before us on the following grounds of appeal :- 1. For that authorities below is not justified in confirming the addition ₹ 3,18,694/- as to the difference of Closing balance of M/s. The Statesman Ltd. and to the books of the appellant. 3. For that the discrepancies pointed out by the authorities below has no reasonable nexus with the books of the appellant and no opportunity was given to the appellant to cross examine the person from whom the information was obtained is clear violation of natural justice and order passed by the authorities below is behind the back of the appellant. 5. The ld. AR before us filed a paper book comprising of pages from 1 to 44 and submitted that the confirmation received u/s 133(6) of the Act was not cross examined with the assessee though the AO was empowered u/s 131 of the Act for calling the party for the attendance during income tax proceedings. The ld AR in this connection also relied in the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As per confirmation collected Difference (Rs) Opening balance 5,75,882/- 2,26,291/- 3,49,591/- Closing balance 4,89,146/- 1,70,453/- 3,18,693/- Net difference between opening closing balance 30,898/- Purchase 11,18,840/- 11,21,891/- 3,051/- Payment 12,05,576/- 11,77,729/- 27,847/- Net difference between purchase and payments 30,898/- The ld. AR also reiterated the submissions as made before the ld. CIT(A). On the other hand the ld. DR vehemently supported orders of the authorities below. 6. We have heard the rival contentions, perused the material on record and duly considered the factual matrix of the case. The issue in the instant case relates to the difference in the amount of credit balance shown by the assessee in the name of party namely, The Statesman limited and the balance shown by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 2,45,830/- in its books of accounts. Thus the AO observed excess of ₹ 1,18,760/- in the name of such party. Accordingly the AO treated the liability as bogus and added to the total income of the assessee. 8. Aggrieved, assessee preferred an appeal before ld. CIT(A). The assessee before the ld. CIT(A) submitted that the difference observed by the AO has no reasonable nexus with the books of accounts maintained by it. The assessee further submitted that the major difference to the closing balance of the party is mainly arising out of the difference in the opening balance. However, the ld. CIT(A) has disregarded the contention of the assessee and confirmed the order of AO by observing as under: - The fact of the case are carefully considered. The assessee has not produced the copy of the detailed ledger account of his concern in the books of M/s. ABP Pvt. Ltd. and has only elaborated upon the concise account details obtained by the A.O. Further the assessee has sought to calculate the difference in purchase payment in the concise account statement given by M/s. ABP Pvt. Ltd. but has not been able to rebut the finding of the A.O. that the assessee has been o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or he has made the payment from unaccounted sources. As such the liability shown by the assessee is fictitious liability and deserves to be brought to tax as it has ceased to exist. However, we find that the AO in the remand report has stated that in the aforesaid difference i.e. ₹ 1,18,760/- a difference of ₹ 80,312/- pertains to the earlier years and therefore the benefit to the assessee should be given for such difference. But on perusal appellate order, we find that there is no whisper about the remand report given by the AO. Thus, it is clear that the ld CIT(A) has passed the order without referring to the remand report given by the AO. The copy of the remand report is placed on pages 29 and 30 of the paper book. The relevant extract of the remand report is reproduced below:- 5. After adjusting the opening balance, there is still a difference of ₹ 38,447/-. A query was raised that whether the assessee has received any credit note, discounts or others from M/s ABP (P) Ltd., The assessee stated that he has o knowledge of that. However, he agreed that the amount payable to M/s ABP (P) Ltd. as on 31.03.2009 is ₹ 2,45,830/-. So it is clear that some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was closed down years ago and there is no evidence of the entity existing in any form. Further though the assessee claimed to have paid two small amounts in cash to this creditor in future years, there is still no evidence. The cash vouchers produced by the assessee are unilateral and there is no evidence of the actual recipient. In the appellate proceedings also the AR could not give the name or address of the person to whom the cash was supposedly paid. This indicates that the liability was bogus and non-existing. In view of the same the addition of ₹ 96,679/- is confirmed and the assessee's ground of appeal No.5 6 are dismissed. Being aggrieved by the order of ld. CIT(A) the assessee is in second appeal on the following grounds of appeal :- 4. For that the authorities below is not justified in confirming the addition ₹ 96,679/- treating the liability of Mls. Yugadharma brought forward from earlier year was bogus and non-existing is merely a guess work and opposed to the principal of natural justice. 14. The ld. AR before us reiterated the submissions as made before the ld. CIT(A) whereas the ld. DR vehemently supported the orders of the author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t business. Therefore the AO disallowed the same to the extent of 25% of the total expenses under the provision of section 40A(2)(a) of the Act and added to the total income of the assessee. 18. Aggrieved, assessee preferred an appeal to the ld. CIT(A). The assessee before the ld. CIT(A) submitted that the above said payments was made for collecting the advertisement business and the payment was made through cheque. However, the ld. CIT(A) disregarded the contention of the assessee and confirmed the order of AO by observing as under : However, the submissions of the assessee are silent on the actual services provided by the unnamed recipients and on the applicability of section 40A(2)(a) of the Act. As a result the ground of appeal is not accepted for want of proper clarifications and explanation about the services performed by the cheque recipients. The disallowance of ₹ 60,364/- is sustained and the ground of appeal No.8 is dismissed. Being aggrieved by the order of CIT(A) the assessee is in second appeal before us by raising the following grounds of appeal :- 5. For that facts and circumstances of the case the authorities below is not Justified sustainin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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