TMI Blog2018 (12) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... e, if the authorities feel it necessary, they may carry out enquiries from the real estate companies, from whom the assessee received commission and also from the customers to whom the commission has been passed over. - Decided in favour of assessee for statistical purposes. Disallowance of advertisement expenditure - failure of the assessee to produce bills of those expenses - Held that:- We find that issue in dispute related to sundry creditors has already been restored to the file of the Ld. CIT(A). This disallowance has been confirmed on the ground that no bills or other documents in support of the expenditure have been produced before the authorities. In the interest of substantial Justice, we feel it appropriate to give one more opportunity to the assessee to produce the bills of documents in support thereof, accordingly, we restore this issue to the file of the Ld. CIT(A) for deciding afresh - Decided in favour of assessee for statistical purposes. - ITA No.3193/Del/2015 - - - Dated:- 7-12-2018 - Sh. O.P. Kant, Accountant Member And Sh. K.N. Chary, Judicial Member For the Appellant : Sh. Gurjeet Singh, CA For the Respondent : Ms. Ashima Neb, Sr.DR ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a copy of ledger account for sundry creditors from 01/04/2007 to 31/3/10 and monthly summary for the same period. The Assessing Officer noted inconsistency in the closing balance of sundry creditors in ledger account and monthly summary. According to the Assessing Officer in the ledger account of sundry creditor, the closing balance as on 31/03/2010 was ₹ 51,79,269/- whereas the closing balance in the monthly summary as on 31/03/2010 was ₹ 42,76,362/-. The Assessing Officer noted that no details whatsoever of those creditors and no evidence of existence of those creditors outstanding as on 31/03/2010 was filed before him. The Assessing Officer further noted that the assessee credited capital account by amount of ₹ 16,77,034.85 on account of writing back of sundry creditor for expenses and this amount was rooted directly to the capital account instead of rooting through the profit and loss account. In the circumstances, the Assessing Officer called upon to explain the chargeability of the said sum of ₹ 42,76,362/- under the provisions of section 41(1) of the Act. The assessee contested that there cannot be any unilateral cessation of the liability and the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isputed the quantum of the addition. 3.1 The facts qua the issue in dispute are that the sundry creditors amounting to ₹ 42,76,362/- were observed by the Assessing Officer since 01/04/2007. According to the Assessing Officer part of the said liability (Rs.16.77 lakhs) was credited to his capital account and thus acknowledged that the assessee was no more required to pay those creditors. The Assessing Officer also noted that no details to establish the existence of the creditors in current year or even their names, conceding thereby that creditors no more existed. The Assessing Officer held the cessation of the sundry creditors amounting to ₹ 42,76,362/- and the benefit accrued as deemed profit and gain of the business under section 41(1) of the Act. During appellate proceedings, the assessee filed additional evidences under rule 46A of Income Tax Rules, 1962 to substantiate its claim that trading liability exist. The Ld. CIT(A) forwarded the additional evidences to the Assessing Officer for his comments. The Assessing Officer objected to the admissibility of the additional evidences on the ground that the assessee was provided several opportunity of being heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. After perusing the order of the AO and the submission of the appellant, my observation is as below: a) The initial onus to authenticate the claims of the expenses is of the assessee and once that is done then the onus is on the Assessing Officer to prove why the credit balances arising out the same transactions cannot be accepted as correct. In this case the appellant has failed to even provide the names of the creditors. In such a situation it is evident that the appellant has failed to discharge his onus, when the burden of proof squarely jay on his shoulders. b) It is not the case that the appellant had provided the names and addresses of the creditors and the AO failed to verify the same by issuing summons u/s 131. In this case no such occasion arose and in the absence of even the names of the creditors the AO has rightly held that all the creditors are nonexistent and thus there is no liability towards them as the appellant does not even know the names of the creditors. c) The. appellant is a property broker and is not engaged in the business of manufacturing any goods wherein it can be held that the creditors were on account of purchase of raw material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the relevant details. The Ld. counsel submitted that if certain details were not filed by the authorised representative of the assessee before the Assessing Officer, the assessee cannot be penalized by way of rejecting the additional evidences produced before the Ld. CIT(A) in the appellate proceedings. He requested that, in the interest of Justice, the additional evidences might be admitted and the matter might be restored to the file of the either Ld. CIT(A) or to the Assessing Officer for deciding the matter afresh in the light of additional evidences. 3.4 The Ld. DR, on the other hand, objected to the request of the Ld. counsel on the ground that the assessee did not fulfil the conditions of Rule 46A of the Income Tax Rules for admissibility of the additional evidences. The Ld. DR submitted that in view of the various decision cited by the Ld. CIT(A), the decision of rejecting additional evidences is justified. 3.5 We have heard the rival submissions and perused the relevant material on record. We find that the Assessing Officer made the addition of observing that no detail in respect of the sundry creditors and their existence was filed before him. The Ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem. To verify and ascertain facts in respect of the issue in dispute, if the authorities feel it necessary, they may carry out enquiries from the real estate companies, from whom the assessee received commission and also from the customers to whom the commission has been passed over. It is needless to mention that the assessee shall be afforded sufficient opportunity of being heard. In the result, issue in dispute is allowed for statistical purposes. 4. In ground No. 3, the assessee has challenged disallowance of ₹ 16,300/- on advertisement. The Assessing Officer made disallowance in view of the failure of the assessee to produce bills of those expenses. The Ld. CIT(A) in his finding has recorded that the authorised representative the assessee argued that those bills were not essential for the allowability of the expenses and accordingly confirmed that this disallowance. 5. We have heard arguments of the parties on the issue in dispute. We find that issue in dispute related to sundry creditors has already been restored to the file of the Ld. CIT(A). This disallowance has been confirmed on the ground that no bills or other documents in support of the expenditure hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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