9911796707
TMI Blog2022 (8) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... enue has raised the following grounds of appeal: 1. "Whether Ld. CIT(A) is right in law and facts to have not exercised powers that are co-terminus with that of the Assessing Officer to examine the issue and not pass order on general hypothesis" 2 Whether the Ld.CIT(A) is right in law and facts in not invoking the applicability of section 41(1) for cessation of liability since the fact that the assessee has not been able to produce confirmation for sundry creditors outstanding" 3 The Appellant prays that the order of the CIT(Appeals) on the above ground be set aside and that of the Assessing Officer be restored. 4. The Appellant craves leave to amend or alter any ground or to submit additional new ground, which may be necessary." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatements of all concerned entities for all these years, where the management and ownership are common/same and nowhere/never adverse view was taken by the Assessing authorities all these years. 4. The Hon. Commissioner of Income Tax(A) has erred on facts and in law in ignoring ground realities that the appellant do not have any holiday and the work has to be carried out even on Sundays and Bank holidays and the Income Tax Act, itself allows exception in such cases. 5. The Hon. Commissioner of Income Tax (A) has erred on facts and in law overlooking several judicial pronouncements upholding the fact that it is a common trading practice to transact amongst sister concerns in case of emergencies and such transactions between sister conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued and duly served. The assessee is into the business of civil engineers and contractors. 4. During the year under consideration assessee has declare turn over of Rs 22,13,33,097/- and other income of Rs 13,28,275/- over which it has declared net profit of Rs 10796682/-. During the assessment proceedings A.O. made adhoc additions on account of sundry creditors for the purchase of material @ 20% amounting to Rs 11241367/-. Same adhoc addition was made @20% on account of sundry creditors for expenses amounting to Rs 30246494/-. She further made additions of Rs 7550000/- on account of cash receipts and payments over Rs 20000/-. 5. Aggrieved with this order assessee preferred an appeal before Ld. CIT (A)-22 Mumbai. The Ld. CIT (A) observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand report. In his remand report, dated 23.08.2019 that has been duly forwarded by the Range Head vide letter of even date, the AO has not made any comment on this reconciliation filed by the appellant. I have also gone through the reconciliation and hold that the observation of the AO that the Balance Sheet does not reflect the true affairs of the state of the appellant as the opening balance of one item as filed by the appellant does not match with the opening balance of that item in the Balance Sheet is not correct. The second issue arising out of the addition made by the AO is the amount on which the disallowance is to be done. The action of the AO in disallowing certain percentage of the closing balance on an estimate basis is not co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... encies she found during the assessment proceedings as under: i) Non filing of confirmations of the sundry creditors for purchases ii) Discrepancies in the opening balance as per balance sheet and submissions made by the assessee iii) Balance sheet of the assessee doesn't reflect a true and fair view of its affairs. iv) Notices issued u/s 133(6) were not responded by the parties. 7. We have gone through the order of the A.O., order of the Ld. CIT (A) and submissions of the assessee along with paper -book filed. We have considered the remand report sent to the office of Ld. CIT (A) by the office of A.O. also. Deficiencies marked by the AO are not sustainable (i) As assessee had filed confirmations of sundry creditors for purchases (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the form no 3CD (Tax Audit Report) and submissions before the authorities below made by the assessee. We found the tax auditor reported these two items of cash receipt and cash payment shown under the column of loan and deposits accepted during the year and not under the column for disallowances to be made u/s 40A(3). These two transactions are in the nature of amounts taken / paid in cash from sister /associate concerns. As assessee has not claimed amount of Rs. 19,50,000/- and Rs. 56,00,000/- as expense in its Profit & Loss A/c, therefore, it cannot be disallowed. 12. Looking at the nature of transactions it is no-where proved that the same can be treated as income u/s 28 or can be disallowed u/s 40A(3) or any other section of the act. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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