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TMI Blog2020 (11) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the assessee had shown Rs. 83,39,310/- as credit balance against sundry creditor namely M/s. Satadal Rice Mill. The AO notes that when he asked the assessee to substantiate the same, the assessee produced a party ledger account showing cash payment. The AO notes that he issued verification letter u/s. 133(6) of the Act to the said sundry creditor, M/s. Satadal Rice Mill. According to AO, letter was returned back on 09-02-2016 with the postal remark "Refused, return to sender address dated 03.02.2016". In this back ground the assessee was asked by the AO to show cause as to why aforesaid sundry creditor amounting to Rs. 83,39,310/- should not be disallowed as unexplained cash credit. According to the AO, the onus to substantiate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ster Data downloaded. It shows that the said company is active and that it was created on 21-08-1997 with three (3) directors, whose names are reflected in the said company master data ( page-3 of the P/B-I). According to the ld.AR, this rice mill has taken secured loan from UCO Bank and that it has squared up the loan in the year 2016. According to ld. AR, the assessee had filed copy of ledger of M/s. Satadal Rice Mills for the period ending 31-03-2013, which is found at page-1 of the P/B-I. Thus according to him there cannot be any doubt about the identity of sundry creditor M/s Satadal Rice Mills. Moreover according to him, the credit reflected in the books of the assessee is nothing , but trade credit, which cannot be added u/s. 68 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marbles, steel furniture and rice. I note that the AO has accepted the sale figures shown by the assessee. However, he has disbelieved the purchases of rice to the tune of Rs. 25,11,464/- supposed to have been purchased from M/s. Satadal Rice Mill. It is common knowledge that without purchases, sales cannot take place. I note that the AO has not rejected the books of account of the assessee, but has made the addition towards the bogus purchase. The assessee has also made the payment to the party in the subsequent year which is evident from the payment of Rs. 5,14,500/-, which fact has been noted by the AO. I note that this is not the case where books of account maintained by the assessee has been rejected and the profit has been estimated. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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