TMI Blog2019 (10) TMI 1174X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities, it has filed various evidences including bills issued by the parties which contain PAN and TIN numbers of the suppliers. The assessee further claims that it has deducted TDS on payments made to those parties and filed necessary TDS certificates before the AO as well as the CIT(A). When payments have been made through proper banking channels and also necessary TDS has been deducted on such payments, it cannot be said that the transactions between the parties are not genuine. Further, when the assessee has filed various evidences including PAN and TIN numbers of the parties to prove identity and also filed evidences of payment by cheque in subsequent years, then there is no reason for the AO to doubt identity and genuineness of transactions merely for the reason of non filing confirmation letters from the parties. The assessee has explained the reasons for non-furnishing confirmation letters from few parties as per which those parties have closed their business before assessment proceedings was completed. In respect of other parties, even though it could not obtain confirmation letters, but filed all possible details including payment proof by cheque along with lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PER G. MANJUNATHA, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order of the CIT(A)-3, Bengaluru, dated 30.04.2017 and it pertains to Assessment Year 2011-12. The assessee has raised the following grounds of appeal:- 1. The CIT-A failed to direct the assessing officer to exercise the option u/s 131 of the I.T. Act in respect of sundry creditors to whom the notice issued u/s 133(6) was not served ever after the appellant had produced the payment of balance outstanding as on 31.03.2011 through banking channel. 2. The CIT(A) erred in confirming the balance outstanding in the sundry creditors account even though the appellant had deducted TDS in respect of all payments to the creditors including the balance outstanding as on 31.03.2011, which proves the identity of the creditors, which the CIT(A) held as not proved the identity of creditors for confirming the addition made by the assessing officer. 3. The CIT(A) erred in confirming the outstanding balance as on 31.03.2011 in the case of M/s. Air State Logistics Couriers Pvt. Ltd. on the basis of information received in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns to the extent of ₹ 18,16,534/- in respect of 4 parties, however, confirmed balance additions in respect of other parties on the ground that although the assessee stated that few creditors have closed their business but could not substantiate its claim with necessary evidences. The CIT(A) further observed that even though the assessee has filed proof of payments to 6 creditors in subsequent years by cheque, but payment by cheque is not sufficient to prove identity of the creditors more particularly when those creditors have not responded to the notices issued by AO. Similarly, the learned CIT(A) has confirmed additions made towards other creditors on the ground that even though some creditors are still in business, but confirmation letters could not be furnished and accordingly sustained additions of ₹ 32,71,075/- in respect of 6 creditors. Aggrieved by the CIT(A) s order, the assessee is in appeal before us. 4. The learned AR for the assessee submitted that the learned CIT(A) has erred in confirming the additions made in respect of 6 creditors even though the assessee has filed complete address of the creditors along with PAN and TIN. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of transactions. According to the AO, notices issued to few parties were returned unserved. Further, in respect of certain parties, even though notices were served, there was no response from those parties. The AO further observed that in respect of M/s. Air State Logistics Couriers Pvt. Ltd., the party has confirmed that no amount was receivable as per the ledger accounts of the assessee as on 31.03.2011. Accordingly, he opined that creditors shown in books of accounts in respect of certain parties were not genuine and accordingly made additions under section 68 of the Income Tax Act, 1961. It is the contention of the assessee before the lower authorities that when sufficient evidences have been filed in order to prove the identity and genuineness of the activities, then no additions could be made merely for the reason that no confirmation letters has been obtained from the parties. The assessee further contended that in respect of certain parties, it could not obtain confirmation letters because those parties had closed their business as on the date of assessment proceedings. In respect of some parties, it could not obtain confirmation letters, even though they are continuing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties as per which those parties have closed their business before assessment proceedings was completed. In respect of other parties, even though it could not obtain confirmation letters, but filed all possible details including payment proof by cheque along with letters from the bankers confirming payment to the party account. Therefore, we are of the considered view that the learned AO as well as the learned CIT(A) had erred in coming to the conclusion that the assessee had failed to file necessary evidences to prove genuineness of creditors. In so far as M/s. Air State Logistics Couriers Pvt. Ltd., we find that the case of the AO is that there is no amount payable to the creditors as on 31.03.2011, whereas the case of the assessee is that the party has responded to the notice issued by the AO and filed ledger account as per which amount outstanding as on 31.03.2011 is ₹ 42,99,294/-. We further noted that as per assessee s books of accounts, balance outstanding as on 31.03.2011 is at ₹ 8,56,641/-. Even going by the details filed by the assessee, there is huge difference in balance as per books of accounts of the assessee and balance confirmed by the party. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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