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TMI Blog2018 (9) TMI 1312X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri B. P. Yadav, Cost Accountant Respondent by Shri Ajay Kumar, D.R. receipts, only the profit element involved in Rs. 16,11,266/- could be taxed in the hands of the assessee. 3. The Ld. CIT(A) erred on facts and in law in confirming addition of Rs. 24,56,630/- made by the Ld. A.O. in the hands of the appellant by not appreciating that most of these creditors are old balances. 4. The Ld. CIT(A) erred on facts and in law in not appreciating the law that the amount of Rs. 24,56,630/- is inclusive of Rs. 16,11,266/- and to the extent of Rs. 16,11,266/- it is double addition. 5. On the facts stated in the statement of facts, the Ld. CIT(A) was not at all justified in confirming the addition of Rs. 24,56,630/- and hence addition of Rs. 24,66,630/- may kindly be deleted. 6. The Ld. CIT(A) erred on facts and in law in confirming the addition of Rs. 30,000/- without appreciating the law that once payee makes payment of tax, no addition could be made in the hands of the payer by invoking the provision of section 40a(ia) of the Act. 7. The Ld. CIT(A) erred on facts and in law in not providing the appellant reasonable and sufficient opportunity to have its say and to make comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the paper book and the break-up includes ING Vysya Life Insurance Company Limited, HDFC Standard Life Insurance Company Ltd., Metlife India Insurance Company Ltd. from whom also the payments were received in the year under consideration and that is why these were reflected in Form-26AS. Learned A. R. submitted that the Assessing Officer has conveniently ignored the part information furnished by the assessee and has wrongly made the addition. 2.1 As regards the second addition of Rs. 24,56,630/- Learned A. R. submitted that the Assessing Officer during the course of assessment proceedings observed that there was credit balance in respect of some insurance companies, the sum total of which was Rs. 1,04,52,273/-. The Assessing Officer issued letters u/s 133(6) of the Act to five parties and it received confirmations from three parties and in respect of ING Vysya Life Insurance Company Limited and SBI Life the Assessing Officer did not receive the reply and therefore, the assessee was show caused. It was submitted that the assessee requested the Assessing Officer to again call for the information and instead of again asking the information the Assessing Officer made the addition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Bharti AXA Life Ins. Co. Ltd. 9,34,300 6. ING Vysya Life Insurance Co. 2,43,750 7. HDFC Standard Life Insurance Co. Ltd. 1,94,775 8. Metlife India Insurance Co. Ltd. 2,80,490 The total difference pointed out by Assessing Officer was to the tune of Rs. 71,64,243/- and the sum total of these bills comes out to Rs. 71,25,310/-. The Assessing Officer noted down the bills relating to only first five companies as mentioned in his assessment order and did not take into account the bills raised to other insurance companies though the complete information was with him. We further find that the balance outstanding in the form of sundry debtors as on 31/03/2009 as per the audited balance sheet was Rs. 70,31,336/-, the break-up of which is placed at page 56 of the paper book. For the sake of completeness, the break-up of debtors as on 31/03/2009 is reproduced below: 1. Aviva Life Insurance Co. 25,110 2. Bharti Axa Insurance Co. 9,34,300 3. Birla Sun Life Insurance Co. 20,55,911 4. HDFC Standard Life Insurance Co. 1,94,775 5. ING Vysys Life Insurance Co. 2,43,750 6. Met Life Insurance Co. 2,80,490 7. Reliance Life Insurance Co. 30,00,000 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the assessee's account. The Assessing Officer without requiring the insurance companies to file confirmation and without confronting the assessee with the differences in confirmations from ICICI and MAX Life, held the credits to be unexplained u/s 68 of the Act and made addition accordingly. We find that all these companies are big companies whose identity, creditworthiness and genuineness cannot be doubted as all the payments were received through cheques which is verifiable from pages 56 to 81 of the paper book where the copy of account of these companies, as appearing in the books of the assessee, are placed. For making addition u/s 68 of the Act, the Assessing Officer has to satisfy himself that the sum credited in the books of the assessee are unexplained. or the explanation offered by him is not satisfactory. In the present case we observe that assessee has received huge amounts as fee for providing services to these parties and therefore, payments received from these companies cannot be termed as ingenuine. The Assessing Officer in his order has not doubted the creditworthiness, identity or genuineness of transactions. He has made the addition only due to difference in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd it is not disputed by the Revenue that these notices were properly served on the given addresses of the creditors. Grievance of the Assessing Officer was that none of the creditors had appeared before him and no written submission/confirmation was filed before him. Assessee has provided complete list of names, addresses and total amount so far as sundry creditors are concerned to the Assessing Officer and after that it is the responsibility of the Assessing Officer to use Revenue Machinery available to him to enquire, find out, investigate and accordingly take the matter to its logical conclusion. This has also been discussed by various judicial pronouncements. The Co-ordinate ITAT Lucknow Bench in ITA No.659/LKW/2016 on the similar issue referred to the judgment of the Hon'ble Apex Court in the case of CIT vs. Orissa Corporation Pvt. Ltd., 159 ITR 78 and observed and held as follows:- "we also find that the Apex Court has held in the case of CIT vs. Orissa Corporation Pvt. Ltd. (supra) that if the Assessing Officer issues notice under section 133(6), it is his duty to bring the process to logical conclusion and non-response of such person cannot be held against the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under rule 46A which provides that ld. CIT(A) may admit those additional evidences after confronting the same before the Assessing Officer to ascertain the veracity of those evidences. Instead of doing this exercise, ld. CIT(A) has summarily rejected the additional evidences placed before him under rule 46A on baseless and frivolous reasons which goes against the principles of natural justice. 14. Taking totality of facts and records into consideration, we find that complete names, addresses, amounts were provided by the assessee including entire confirmation from these creditors as appearing from pages 7 to 99 of the paper book filed before us. Ld. CIT(A) has also not given a clear cut finding on the issue and has simply accepted the version of the Assessing Officer and the Assessing Officer, without taking procedure initiated by him under section 133(6) to a logical conclusion, has held the assessee liable for non-production of creditors, which is not warranted within the purview of tax legislation. 15. In view of the matter and on the basis of analysis and examination of the facts and records hereinabove, we set aside the order of the ld. CIT(A) and allow the appeal of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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