TMI Blog2019 (12) TMI 1113X X X X Extracts X X X X X X X X Extracts X X X X ..... untant. Books of accounts of the assessee has not been rejected by assessing officer. Once the transaction gets completed, it may happen that the creditor may not cooperate in income tax proceedings and does not respond to notice under section 133(6) of the Act issued by AO during scrutiny assessment. The assessee submitted before the bench that brought forward balance of ₹ 41,84,399/- relates to assessment year 2012-13 and AO had already examined them in the assessment proceedings for A.Y.2012-13, therefore, these should not be treated bogus sundry creditors. In assessee`s case some of the creditors also replied the notice under section 133(6) of the Act. The ld DR for the Revenue did not doubt the factual position narrated above. Considering the entirety of the facts and circumstances of the case, we delete the addition - Decided in favour of assessee. - ITA No.163/Kol/2018 - - - Dated:- 24-12-2019 - Shri S.S. Godara, JM And Dr. A.L. Saini, AM For the Appellant : Shri Subash Agarwal, Advocate For the Respondent : Smt. Ranu Biswas, Addl. CIT ORDER PER BENCH: The capt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estment of ₹ 14,19,634/- for investment in purchase of land; and on account of unaccepted Agri income of ₹ 25,50,349/-; along with unproved Sundry Creditors amounting ₹ 66,74,070/- totaling ₹ 1,14,44,050/-. Keeping in view of the aforesaid facts, the issue wise decision is as under : 4.1 First issue relates to the addition of ₹ 8,00,000/- which was claimed by the company as a share application money from B.K. Das Sons. The A.O. has not accepted the confirmation submitted from M/S Dilip kumar Das Sons on the ground that the reply submitted by the appellant is an afterthought story. The A.O. has held that it was unexplained money of the appellant. The appellant in his submission has argued that the said firm has given two cheques of ₹ 50,00,000/- ₹ 8,00,000/- to the appellant but the cheque of ₹ 8,00,000/- could not be encashed. That since the petitioner requires fund urgently for payment to the seller of land, he made deposit into the bank in cash on22/05/12 and issued cheque to the seller on even date which was en-cashed on 28/05/12, Xerox copy of bank statement and payment vouc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jaydeep Das has made investment of ₹ 18,60,000/- from the share application money and the said director hasrecorded the said share application money in his statement of affairs as 31/03/2013. It is submitted that: a) The said investment of ₹ 18,60,000/- was urgently required to pay registration charges of land to the office of the District Registrar for purchase by the company. b) The Statement of Affairs of said director as on 31/03/2013 is part of PB in pages 51. c) The IT Acknowledgement for A.Y. 2013-14 of said director is also part of PB in pages 52. d) The said director personally appeared before the A.O. and confirmed said payment in cash for the purchase of payment of registration fee. The above addition is against the natural justice and facts as such the addition ought to be deleted. Keeping in view of the aforesaid fact that director of the company personally appeared and it was the director of the company who spend on behalf of company from his own account and the same has been duly confirmed by the director, his creditworthiness or identity has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ociation attached in PB being pages 38 to 46. f) It is worthwhile to note that Ld. ITO found the nature of Business of your petitioner as 'Trading of green tea leaf and production of green tea leaf and other agricultural products. g) Total sale receipt from the agriculture crops was ₹ 25,50,349/-, out of which payment amounting ₹ 11,21,439/- received through bank, a copy of ledger a/c attached in page 47 of PB. Hence, no additions are called for as it is also against the facts, evidences and natural justice. In this case, the appellant has stated that payment amount to ₹ 11,21,439/- was received through banking channel. The AO has not made any attempt to verification of sale made through baking channel. Over remaining sale, the appellant has not been able to establish the receipt as the same was not verifiable. The sale receipt on account of agricultural income through cheque is verifiable therefore, to the extent of income received through cheque cannot be treated as unexplained income. Therefore, out of total addition of ₹ 11,21,439/- deserves to be deleted. As regard the remaining additions are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of the assessee company except one, namely Sri Premandra Sarkar, in order to judge the authenticity of sundry creditors, summon u/s 131 were issued on 21.03.2016 to all the eleven sundry creditors and processed to be served on them throught the inspector of this office. Out of 11 (Eleven) summons, 6 (Six) were returned back 'unserved' with the note that the persons are not found. He could serve to only five of them and nobody turned up during the fixed date. As per the report submitted by the inspector it is seen that he could not find the remaining six sundry creditors. As regard the authenticity of sundry creditors, three basic things have not been established: a) Identity of the sundry creditors b) Credit worthiness of the sundry creditors. c) Genuineness of the transaction. The burden to prove the identity, Credit Worthiness and genuineness of the transactions rests on the assessee but the assessee completely failed to prove the same. a) Identity of the sundry creditors: The identity of the sundry creditors could not be established at all. Summons under section 131 could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability undersection 41(1)and current creditors of ₹ 24,89,671/- treated as Unexplained Cash Credit under section 68 . Similar report was obtained at remand stage too. During the course of appellate proceedings, the appellant was asked to submit details of purchase parties and to produce the parties along with their proof of trading activity or agricultural activity which can prove that the aforesaid sale were made to the appellant by those creditors. The appellant failed to produce any of the creditors or their corresponding purchasing or proof of their activity of doing trading of agricultural produce or agricultural activity rather their genuinity of transaction could not be proved. Therefore, it is held that creditors could not be proved by the appellant. It is also a matter of fact that total creditors are claimed at ₹ 66,74,070/- out of which the appellant claims that the aforesaid creditors also includes the opening creditors of F.Y. 2011-12. The chart is as under: During the course of appellate proceedings, the app sources of payment and date of payments made to afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral expenses, Xerox of voucher of expenses and EPF payment receipt for labours included in paper book in pages 1 to 15. As per land record the classification of land is Danga/Sahari/Dahala/tea estate. Petitioner herein submits land khatian in the name of vendor and land revenue receipt which are attached in pages 16 to 33 of PB. As per circular dated 21/11/1973 issued by Govt, of West Bengal, DANGA means High arable land growing jute or spring crop or vegetable . Circular submitted in page 34 to 37 of PB. With other objects of company, there is object of FARMING according to page 8 of Memorandum of Association which object is being pursued by the company. Memorandum of association attached in PB being pages 38 to 46. It is worthwhile to note that Ld. ITO found the nature of Business of assessee as 'Trading of green tea leaf and production of green tea leaf and other agricultural products. Total sale receipt from the agriculture crops was ₹ 25,50,349/-, out of which payment amounting ₹ 11,21,439/- received through bank, a copy of ledger account attached in page 47 of PB. The ld DR however, reiterated the stand taken by the AO. The assessee has submitted these al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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