9911796707
TMI Blog2017 (6) TMI 919X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) The learned CIT (A) further erred in confirming addition of Rs. 15,33,000/- on account of remittance out of income earned out of India." 3. In this case, return of income declaring income of Rs. 3,61,392/- was filed on 30th September, 2009. Subsequently, the case was selected under scrutiny by issuing notice u/s. 143(2) of the act. The brief facts of the case are elaborated under the different grounds of appeal as below. Ground 1 of the assess and Ground 1 of the Revenue 4. During the course of appellate proceedings, the assessing officer asked the assessee to furnish confirmation related to the creditors, complete details of purchase including purchase ledgers and evidences for introduction of capital. Thereafter, the assessing officer issued letter u/s. 133(6) of the act to the creditors to verify the transactions. As a result the assessing officer noticed that the creditors were not existed at the given address. Thereafter, a show cause was issued to the assessee pointing out that the parties. i)Shri Jitendra Jain ii) Mona Fabrics iii) Radha Synthetics iv) and Shanti Creation were not residing at the address given on the confirmation produced by the assessee. And, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said creditors were not existed at the given addresses. AO proposed to make addition of Rs. 2,71,32,085/-, total of the amount shown against the creditors in the balance sheet. Assessee did not give any reply nor was any documentary evidence produced to claim the genuineness of creditors. Consequently, in absence of any reply on the part of assessee, AO treated the entire creditors of Rs. 2,71,32,085/- as unexplained and added to his income. 5.2 During the appellant proceedings, it was submitted by appellant that the AO erred in not confronting evidences collected behind the back of appellant therefore such additions are bad in law. It was further submitted that recovery of certain debtors was in problem and legal proceedings were initiated against such debtors therefore he was unable to make payments to the creditors and in such peculiar circumstances it was not possible to contact the creditors for confirmations when their amounts itself were not paid. It was also submitted that creditors are normally old ones but the payments outstanding as on 31.3.2009 are mainly related to purchases of the current year. Further, the AO has not doubted the sales which is not possible witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owance of Rs. 67,83,020/- is justified in place of Rs. 2,71,32,085/- as disallowed by AO. I, therefore, confirm the addition to the extent of Rs. 67,83,020/-. Appellant gets part relief." 5. We have heard the rival contentions of the parties. We have also gone through the paper book furnished by the ld. counsel containing detail of judicial pronouncements and submission made before the assessing officer etc. We have noticed from the findings of the assessing officer and the Ld. CIT(A) that the purchase parties were not found to be existed at the given addresses. In spite of giving opportunities, the assessee failed to prove the genuineness of the transactions as a result whole of the purchases were disallowed by the assessing officer. The ld. CIT(A) had restricted the disallowance to the extent of 25% of the total disallowance on the basis of the decision of ITAT Ahmedabad in the case of Vijay Proteins Co. vs. ACIT 58 ITAT 528(Ahd). We noticed that the disallowance of whole of the purchases by the assessing officer was excessive therefore 25% of the alleged disallowance confirmed by the Ld.CIT(A) appeared to be reasonable after placing reliance on the pronouncement of Vijay Prote ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;hat the purchases involved for disallowance u/s 40A (3) are the same which have already been considered by AO as unexplained creditors therefore for the same amount additions cannot be made twice. In my opinion, this argument of appellant is also misplaced. The disallowance u/s. 40A (3) of the Act has been made in respect of those transactions where payments have actual y been made whereas unexplained creditors have been treated against those purchases where payments have not been made by appellant. Thus, both type of transactions are distinctively separate. It is therefore held that appellant has made the aforesaid payments by contravening the provisions of section 40A (3) and the AO has been justified in disallowing the expenses of Rs. 59,65,729/-. In such situation, the disallowance made by the A.O. is confirmed and the ground of appeal is dismissed." 7. We have heard the rival contentions. We have noticed that the assessing officer has obtained photocopies of cheques from the bank and detected nature of payment made through these cheques were above Rs. 20,000/- towards purchase made by the assessee in violation of provision of section 40A(3) of the act.. We have further notic ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
