TMI Blog2017 (12) TMI 1219X X X X Extracts X X X X X X X X Extracts X X X X ..... ken one view, the said order cannot be treated as prejudicial and erroneous to the interest of the revenue as held by Hon’ble Supreme Court in the case of CIT Vs. Max India Ltd. [2007 (11) TMI 12 - Supreme Court of India]. In the instant case, there is no dispute that the freight payment already made and two views are possible for disallowance u/s 40(a)(ia) and the AO has taken one of the possible views. Hence, there is no case for taking up the case for revision u/s 263. Accordingly, we set aside the order of the Ld.CIT on this issue and allow the appeal of the assessee on this ground. Addition on account of sundry creditors - Held that:- After due verification of the books of accounts, the AO completed the assessment. Outstanding sundry creditors is not the income and it is a liability to be paid by the assessee. Merely for not submitting the confirmations, there is no case for under assessment which is prejudicial to the interest of the revenue and cannot be held against the assessee. Since the assessee has produced the books of accounts and after due verification of the books of accounts, assessment was completed, without referring any defects with regard to sundry creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 40(a)(ia) of the Act for non deduction of tax at source. The AO has not verified the non deduction of tax at source and resultant additions to be made u/s 40(a)(ia) of I.T. Act. (iii) As per the balance sheet an amount of ₹ 22,49,205/- was shown as sundry creditors but the assessee has filed the confirmations to the extent of ₹ 20,40,230/- and the AO has not made the difference amount as addition. (iv) The fourth and final issue is that the assessee has shown very low profit margin. Against the sales of ₹ 4,26,55,885/- the income declared by the assessee was ₹ 3,14,020/- which was very low in this line of this business. 3.1. In view of the above reasons the Ld.CIT held that the order passed u/s143(3) dated 13/08/2012 is erroneous and prejudicial to the interest of the revenue and accordingly set aside the order of the AO and directed the AO to redo the assessment after examining the above issues. 4. Aggrieved by the order of the Ld.CIT, the assessee filed appeal before us. During the appeal hearing, Ld.AR argued with regard to the first issue of commission from M/s Dodla Dairy Ltd., that the assessee has not received any commission duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clared price paid to its milk producers and agents at the time of purchase respectively. 14. It is mutually agreed that apart from milk price the overheads shall be paid per Ltr as hereunder : (i) 01.01.09 to 31.03.10 - ₹ 2.00 (ii) 01.04.10 to 30.09.10 - ₹ 2.75 6.1. As per the terms and conditions of the agreement, apart from the sale price of the milk, the assessee is entitled for commission on par with Krishna District Co-Operative Union s. Similarly, the assessee is also entitled for overheads @2/- per litre from 01.01.09 to 31.03.10 and ₹ 2.75/- per litre from 01.04.10 to 30.09.10. From the Profit Loss account, it is observed that the assessee had admitted only sale of milk but not admitted the commission as well as the overheads. During the appeal hearing, the Bench has asked the assessee to submit account copy of the assessee with Dodla Dairy Ltd., but the assessee failed to furnish the same. From the agreement, it is evident that the assessee is entitled for commission as well as the overheads, but the same was not admitted in the return of income. The assessee is following mercantile system of accounting and the assessee required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue as held by Hon ble Supreme Court in the case of CIT Vs. Max India Ltd. [295 ITR 0282]. In the instant case, there is no dispute that the freight payment already made and two views are possible for disallowance u/s 40(a)(ia) and the AO has taken one of the possible views. Hence, there is no case for taking up the case for revision u/s 263. Accordingly, we set aside the order of the Ld.CIT on this issue and allow the appeal of the assessee on this ground. 8. The third issue is with regard to the addition required to be made on account of sundry creditors. The Ld.CIT observed that there was outstanding sundry creditors of ₹ 22,49,205/- as at the end of the year and the assessee has furnished confirmations to the extent of ₹ 20,40,230/- and for the difference amount of ₹ 2,08,975/- the assessee failed to furnish the confirmations. Hence, the Ld.CIT was of the view that the assessment order was erroneous and prejudicial to the interest of the revenue, thus directed the AO to call for the details and decide the issue. During the appeal hearing, Ld.AR submitted that the assessee has maintained regular books of accounts, purchases and sales are properly ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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