TMI Blog2021 (7) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... ition - HELD THAT:- As gone through the reconciliation of sundry creditors and note that the said reconciliation of sundry creditors was not examined by the ld.Assessing Officer during assessment stage. Therefore, we are of the view that said reconciliation chart of sundry creditors should be verified by ld.Assessing Officer. Therefore, we remit this issue back to the file of the assessing officer with the direction to verify the above reconciliation of creditors and allow the claim of the assessee in accordance with law. Additional ground raised by the Revenue is allowed for statistical purposes. - ITA No.3509/AHD/2016 - - - Dated:- 28-6-2021 - Shri Pawan Singh, JM And Dr. A. L. Saini, AM For the Assessee : Shri Rajesh Upadhyay, AR For the Revenue : Shri O. P. Vaishnav, CIT(DR) ORDER PER DR. A. L. SAINI, ACCOUNTANT MEMBER: Captioned appeal filed by the Revenue, pertaining to the Assessment Year (AY) 2011-12, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), Valsad [in short the ld. CIT(A) ] in Appeal No. CIT(A)/VLS/76/14-15/1047 dated 21.10.2016 which in turn arises out of an assessment order pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Succinct facts are that assessee has claimed partner's capital totaling to ₹ 1,67,24,489/- in the return of income. The assessee was given several opportunities to furnish details or source of capital, but the assessee failed to do so during the assessment stage. Therefore, assessing officer held that assessee failed to fulfill the genuineness of such capital viz. whether it has been transmitted through banking or other indisputable channels and the creditworthiness or financial strength of the partner. Therefore, an amount of ₹ 1,67,24,489/- was disallowed as unproven capital. 6.Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has deleted the addition made by the [ Assessing Officer. Aggrieved by the order of the ld. CIT(A), the Revenue is in appeal before us. 7. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record.Learned DR for the Revenue has primarily ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s return for A. Y. 2010-11 that filed on 09.10.2010. Figures of interest, remuneration share of profit are as per profit and loss account for the year under consideration. Regarding new introduction of capital in current year following verification is made. Date of issue of cheque Amount paid by Shri Santosh kumar from M/s Twin E- towers to M/s Western India Date of issue of cheque Amount paid by Shri Suresh kumar from M/s Twins E-towers to M/s Western India Amount with drawn by M/s Twin E-towers to Shri Santosh Kumar and Suresh kumar. Cheque number: Cheque number 28.04.2010/544502 1,00,000/- 28.04.2010/544502 2,00,000/- 3,00,000/- 11.05.2010/544423 99,000/- 11.05.2010/544423 9,000/- 1,98,000/- 26.05.2010/264711 1,15,000/- 26.05.2010/264711 1,15,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Twin E Power files its return of income. But the assessing officer has commented that the partners has not filed the return for this year so addition of ₹ 1,67,24,489/- be made.The undisputed facts are that whatever capital introduced by the partners in their capital account, stands explained. The opening balance does not suffer from any infirmity. Similarly, additions on account of interest, remuneration, profit and entries of withdrawals have also not been disputed. In view of all this, no addition can be made in the hand of the assessee of the total outstanding capital balance at the end of the year in the capital accounts of the partners simply because the partners have not filed their return of income. As the entries of credit and debit in the capital accounts of [ the partners has been admitted as genuine so the addition of ₹ 1,67,24,489/- being the total of outstanding capital balance of the partners in the books of the assessee was deleted by ld CIT(A). We note that Hon`ble High Court of Madras in the case of Smt. B. Jayalakshmi, [2018] 96 taxmann.com 486 (Madras), held that where Commissioner (Appeals) on basis of remand report of Assessing Officer, allowed cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessing officer has not specifically pointed out any defect in the unsecured loans so no addition in regard to unsecured loans of ₹ 40,73,500/- was asked. In view of this, the addition made of ₹ 40,73,500/- of outstanding unsecured loans in the balance sheet is deleted. In regard to the sundry creditors of ₹ 1,73,80,759/-, the assessing officer made this addition for want of response from the assessee during the assessment proceedings. However, during the appellate proceedings, the AR of the assessee submitted that the requisite reply was filed on 24.03.2014. In the interest of nature justice a remand report was called for from the assessing officer. In the remand report 20.05.2016, the assessing officer has dealt with this issue at length. Enquiries u./s 133(6) of the Act were made and as a result, the assessing officer observes that in a number of cases either the notices were received back unserved or no reply was received. Similarly, in some cases there were differences in the amount outstanding. A detailed chart was prepared and was submitted along with the remand report by the assessing officer. For the sake of convenience the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een assessee and party is noted G Arnbica Steel Suppliers 09.09.2015 Served/ 15.09.15 R 26,58,992 12,28,791 14,30,201 2658992 700201 -do- H Sandipkumar Jayku mar Shah Co 09.09.2015 Served/ 15.09.15 75755 495162 Mo reply received from 'a 1 hence the The above discrepancies were confronted to the assessee during the remand proceedings. From the reply received, the assessing officer concluded as under: The assessee has made reply on 18.01.2016 in following manner: (i) Ambica Steel Suppliers: As per assessee's books, credit balance is ₹ 7,00,201/-, however, as per parties confirmations, the same is ₹ 14,30,201/-. The assessee explain that the party has credited ₹ 7,30,000/- in their accounts, but, no such payment was made by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No difference. Account Tallied. 3 Maruti Steels Opening Balance c/f. - No Transaction in current year. Page 3 of remand report. 4 National Electricals 5 Shree Sai Transport Opening Balance ₹ 8,53,500/-. Payment made ₹ 3,00,000/- in this year. There is no new credit transaction in the year of appeal. 6 Kesar Steel Suppliers There is no new credit transaction in the year 7 Ambica Steel Suppliers under appeal. Payment of old credit balance is made in part, in this year. 8 Sandeepkumar Jaykumar Shah Company The notices have not responded A.O's notice. However, notices were served upon them. Credit entries are supported by bills and payments are through account payee cheques. Related expenses were allowed. Non-receipt of reply from the creditor cannot attract provision of Section 68 or Sector, 41 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elated expenses were allowed and payments were made through cheques. Non-receipt of reply from the creditors cannot attract section 68 or Section 41(1) of the Act. I have given my careful thoughts to the rival submissions and do not agree with the contention of the AR of the assessee. The AR of the assessee was duty bound to explain the credits appearing in the books of accounts and should have produced the related bills and vouchers before the assessing officer during the remand proceedings. The assessing officer has observed no reply in respect of these creditors was filed. In the circumstances, the addition on account of these unexplained credit entries is called for. Hence, the assessing officer is directed to make the addition on account of these eight above mentioned sundry creditors. Therefore, this limb of the ground of appeal is partly allowed. 13. Aggrieved by the order of the ld. CIT(A), the Revenue is in appeal before us. 14. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) upheld additions: Ambica Steel 43- CIT(A) 736600 Sandeep Kumar 495172 Sai Supplier 322100 Bhagwati Traders 822477 Monica Roofing 253325 Scaff World 340029 Shy Engineering 183478 Bhakti Sales Agency(Balance ₹ 480487/- Difference in balance ₹ 10150/- is directed to be added) 480487 3633668 429205 Department has disputed credit of V-4 Promoters in appeal Memo 423724 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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