TMI Blog2011 (12) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... chemical.and colour), of which the assessee failed to prove the genuineness thereof. (2) The Ld. CIT(A)-IV, Rajkot has erred in law and on facts in deleting the addition of Rs.1,29,85,264/- on account of sundry debtors which were given in the name of advances of which the assessee failed to prove the genuineness thereof.. 3. The brief facts of the case are that the assessee is engaged in the business of manufacturing Porsolin. During the assessment proceedings, the AO noticed new sundry creditors of Rs.13,02,68,979/-. The AO asked the assessee to furnish the details but the same was not produced. Therefore, the AO made the addition of Rs.13,02,68,979/- as unexplained sundry creditors. Before the CIT(A) it was submitted by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee by the CIT(A), he found that explanation submitted by the assessee prove that the entire transactions are fully evidenced and have been entered through banking channel. The Assessing Officer has verified the above transactions from the State Bank of India who confirmed the above transaction. However, in case of H R Johnson (India) Ltd. and Bhell Peari Ceramics Ltd., the AO was of the view before the CIT(A) that the assessee has failed to justify the genuineness of the creditors. In rejoinder, the assessee furnished the explanation and details which has been considered by the CIT(A) and found that there are enough documentary evidence to suggest that transaction is genuine with the parties and identity of the vendor stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VAT No. and CST Np. which establishes the genuineness and identity of the supplier. Copy of VAT Form No.403 issued by the vendor, transport L.R. to support that the goods were delivered The notices might be returned back due to insufficient address on which the AO sent the notices. Thee alternate contention of the assessee that the transaction is in respect of purchase of capital goods which was not debited to the trading and profit and loss account but it was debited in plant and machinery account, hence, no addition can be made. As regards the another party Bhell Peari Ceramics Ltd., we find that the similar type of details were furnished. The assessee purchased colour chemical and same was accounted for in books of accounts. It is pert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objected about the genuineness of the 32 creditors amounting to Rs.1,29,85,264/- of which detail is given at page-15 of CIT(A) order. The CIT(A) accepted the assessee s contention that most of the debtors are trade debtors and copies of their accounts were filed which shows that the assessee was having regular transaction with those parties. In some of thee accounts, there was opening balances which were carried forward to this year without any transaction of purchase and ales during the year. The CIT(A) was of the view that in these circumstances, no addition is warranted. It has been also noted by CIT(A) that various debtors have also confirmed that transaction with the assessee. The CIT(A) followed the order of ITAT, Mumbai Bench in cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books of accounts. The details could not be produced before the AO on account of sufficient reason with the assessee. The details filed before the CIT(A). The CIT(A) after providing opportunity of hearing to the AO and after obtaining remand report, found that these transactions are routine transactions recorded in the books of accounts on day-to-day basis. In most of the cases, there were no opening balances and there were no transactions during the year. As discussed above that merely the notices issued by AO u/s.133(6) of the Act are not responded by the concerned parties. The assessee cannot be penalised by making addition in the hands of the assessee. We find that the sole reason for making addition by the AO was that some of the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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