TMI Blog2020 (12) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... hip concern had been closed down due to financial problems so it can be presumed that it was the reason why the AO's notice u/s. 133(6) could not be served upon it, so no adverse view was warranted against this sundry creditor. Other two sundry creditors M/s. Lhaki Steels and Rolling Pvt. Ltd. and M/s. Bhutan Rolling Mills were non-residents and had been duly served the notice issued by AO u/s. 133(6) of the Act, and they both have already furnished their confirmation to have received the balance amount from assessee by RTGS/NEFT. - no addition was warranted u/s. 68 of the Act and therefore direct the deletion of addition - Decided in favour of assessee. - I.T.A. No. 41/Gau/2019 - - - Dated:- 27-11-2020 - A.T. Varkey, Member (J) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20,47,374/- 3. Bajrang Traders, Golapi Market, NH-37, Lalmati,Beltola, Guwahati-781029 7,68,215/- Total 35,34,509/- According to the Assessing Officer, even though he confronted the assessee about non service/response of notice u/s. 133(6) of the Act to these sundry creditors, no satisfactory replies were received from the assessee, therefore he made an addition of ₹ 35,34,509/-. 4. Aggrieved the assessee preferred an appeal before the ld. CIT(A) who confirmed the action of Assessing Officer by holding that even though the assessee discharged the initial onus on her to furnish the details of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the assessee was indebted to pay for this trading liability was duly reflected which according to him, could not have been added u/s. 68 of the Act. Further, according to ld. AR, these tradable materials were purchased by the assessee in respect of two sundry creditors to the tune of ₹ 27,66,294/- emanates out of balances brought forward from the earlier years in the previous year (not in this F.Y.) and the assessee had later squared up this credit in the subsequent assessment year. According to ld. A.R, these are trade credits and not a sum of money credited in the books of the assessee and therefore Section 68 addition is not attracted. According to him since no sum of money was credited in the books of the assessee from these th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed goods to the assessee are foreign entities and non-residents of India which fact is discernible from their postal address and they are both residents of Bhutan. In respect of M/s. Lhaki Steels and Rolling Pvt. Ltd. (sl. No. 1) (supra) the Ld. AR drew our attention to page no. 15 of the Paper book from which I note that the assessee has purchased goods worth ₹ 7,18,920/- on 30.09.2012 i.e. previous assessment year (AY 2013-14) and this amount had been debited in M/s. Lhaki Steels account (supplier/creditor's account) i.e. AY 2013-14 and assessee has squared up the payments on 27.03.2015 31.03.2015 through bank RTGS a sum of ₹ 5,00,000/- and ₹ 2,18,920/- respectively (i.e. AY 2015-16) and then this amount was credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/- on 31.03.2014 (i.e. in AY 2016-17). According to Ld. A.R this sundry creditor was a proprietary concern from inception and it had to be closed down due to financial constraints which fact is evident from a perusal of copy of letter which is found at page 22 of the PB. Since the business of this sundry creditor M/s. Bajrang Traders, Gauhati was closed down, the AO's notice u/s. 133(6) could not be served upon it and this was the reason why the AO drew adverse inference against the genuineness of this sundry creditor. 10. Thus from the facts and circumstances discussed supra, I note that the out of total outstanding credits of ₹ 2,23,89,337/-[total number of sundry creditors were eleven (11)], the Assessing Officer was not sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the invoice raised by the said supplier which inter alia comprised of the details of purchases, name, address, PAN, VAT details of the supplier. The quantity and value of purchases formed part of the audited accounts, quantitative details, gross profit margin and also various accounting ratios of the appellant. In the report furnished by the tax auditor in Form 3CA, no adverse comments or qualifications have been given in this regard. Further no specific infirmity or defect has been pointed out by the AO in respect of the books of accounts of the appellant. In the confirmation letter placed at Page 22 of PB, it has also been clarified by Shri Saugata Bhowal, proprietor of M/s. Bajrang Traders that his proprietorship concern had been closed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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