TMI Blog2014 (1) TMI 1924X X X X Extracts X X X X X X X X Extracts X X X X ..... mplete details of sundry creditors which are outstanding as on date. Admittedly, these sundry creditors are outstanding out of the purchases made. Assessee submitted the transaction with those sundry creditors were made in the FY 2003-04 and thereafter there was no further business with those parties and those sundry creditors were outstanding due to disputes. Once it is a fact that these sundry creditors are outstanding and assessee has not written off those creditors, these cannot be assessed as income of the assessee. All the parties have confirmed these sundry creditors u/s. 133(6) of the Act as notices were issued by the AO as replied by these sundry creditors. Once this is the position, the sundry creditors cannot be considered as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by AO on account of bogus sundry creditors amounting to Rs.99,84,733/-. For this, assessee has raised following ground nos. 1 and 2: 1. That on the facts and circumstances of the case the Ld. CIT(Appeals) has erred in law as well as on the facts in confirming the additions of Rs.9984733/- on the alleged ground of Bogus Sundry Creditors of F.Y. 2003-04 relevant to assessment year 2004-05. 2. That the Ld. CIT(Appeals) has erred in law as well as on the facts in not taking cognizance of the reply received from the Sundry Creditors in response to Notice u/s. 133(6) of the I. T. Act, 1961, and merely on the basis of suspicious, surmises and conjecture, confirm the additions made on this account, which is unjustified and not tenable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) is not supposed to pass ex parte order but to decide on merits and material available after providing reasonable opportunity of being heard to the assessee. We find that the CIT(A) has not gone through the details properly. He just simply influenced by the assessment order. First of all it is a fact that these sundry creditors are outstanding as on 31.03.2006 and these sundry creditors are on account of supply of materials i.e. iron and steel. The assessee has also filed confirmations, details of sundry creditors, details of purchases made from FY 2005-06 relating to this AY 2006-07. Even now before us assessee has filed complete details of sundry creditors which are outstanding as on date. Admittedly, these sundry creditors are outsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as receivable. The assessee before the AO contended that loans and advances given to M/s. Ganesh Commercial Co., the loan debtor, is a sister concern of the assessee company and no interest has been charged on the same. Hence, AO charged interest @ 12% of the loan amount. Aggrieved, assessee preferred appeal before CIT(A) and he decided the appeal ex parte by stating that the assessee failed to produce books of account and documentary evidences called for. Aggrieved, assessee came in appeal before us. 6. We have heard rival contentions and gone through facts and circumstances of the case. We find that the assessee company has not charged interest on this loan for the reason that during the relevant previous year there was a business tran ..... X X X X Extracts X X X X X X X X Extracts X X X X
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