TMI Blog2023 (4) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee, has directed the Assessing Officer to make enquiries in respect of said liability shown by the assessee as noted above. Similarly, in respect of other two parties, the notices sent to them were received back unserved. The ld. CIT(A), under the circumstances, though at the first instance, deleted the additions made by the Assessing Officer but thereafter directed the Assessing Officer to make further enquiries in this respect as reproduced in earlier part of this order. No infirmity in the order of the CIT(A) in directing the Assessing Officer to make further enquiries. There is no merit in the appeal of the assessee and the same is accordingly hereby dismissed. - Shri Sanjay Garg, Judicial Member And Dr. Manish Borad, Accountant Member For the Appellant : Shri Ananda Sen, Adv. S. Mandal, Adv. For the Respondent : Shri P.P Barman, Addl. CIT-DR ORDER PER SANJAY GARG, JUDICIAL MEMBER: The present appeal has been preferred by the assessee against the order dated 23.11.2021 of the National Faceless Appeal Centre [hereinafter referred to as the CIT(A) ] passed u/s 250 of the Income Tax Act (hereinafter referred to as the Act ). 2. The appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nil 15,80,550 Notice returned comment - unknown 4 Samanta Brothers Nil 1,91,625 1,00,000 91,625 No reply received 5 Sharma Electricasl Iron Works 3,00,000 15,48,330 9,77,545 8,70,785 Reply received by post 6 Swaphal Electrical Stores 80,91,288 35,50,900 27,15,844 89,26,344 Reply received by email 7 Swastik Trading Mfg. 21,64,314 Nil Nil 21,64,314 Notice returned comment - unknown The Assessing Officer thereafter discussed the reply/status etc of the sundry creditors and found that the sundry creditors in respect of five parties were either not genuine or the liability of the assessee in case of five sundry creditors had ceased to exist. The Assessing Officer, in this respect, has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced in support of his transaction done with the assessee, it is seen that the last transaction was done on 12/2/2012 and the sundry creditor balance has been brought forwarded from A. Y: 2012-13 till date. First and foremost there seems no existence of the party as the notice served in the full address as per the tax invoice return un-served with the comment of the post office UNKNOWN Secondly, no prudent businessman would leave his dues receivable pending for so long without giving time to time reminders to the assessee either through letters or telephonic calls. Lastly, on query to the assessee regarding the name, phone number, email address and other details so that the undersigned could get in contact to collect information needed, the assessee claimed he did not have any of the sought for details. From the above discussion, it is clear that the claim made by the assessee is incorrect and no liability as claimed by the assessee in his books of account exists. Hence, the total sundry creditor of Rs.15,80,550/- is added back and penalty u/s 271 (1)(c) is initiated for furnishing of inaccurate particulars. 10. In the case of M/S Swastik Trading Mfg. Co., t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or claimed as discount has not been disclosed, is added back and penalty u/s 271(1)(c) is initiated for furnishing of inaccurate particulars. The Assessing Officer, therefore, held that the liability of the assessee in respect of aforesaid five creditors has ceased to exist. He, therefore, made the impugned addition in respect of the aforesaid liability shown by the assessee as income of the assessee at Rs.85,42,010/-. 5. Being aggrieved by the above order of the Assessing Officer, the assessee preferred appeal before the CIT(A). 6. The ld. CIT(A), in respect of M/s Goodwill Corporation, observed that a sum of Rs.28,87,040/- was reflected as opening balance in the books of account of the assessee in respect of above creditor and the same amount was shown as closing balance on 31.03.2014. Apart from that, the assessee had shown purchase of goods of Rs.29,86,200/- from the said party during the year and the entire amount was paid during the same financial year. The said party in response to the notice issued u/s 133(6) of the Act, sent reply, wherein, it stated that we hereby declare that Shri Arun Kumar Bose is completely unknown to us and we have done no transaction wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ify the year in which the said liability to the extent of Rs.28,87,040/- was originated by way of credit entries in the books of account of the assessee against the party concerned. 4) Also, the AO may carry out investigation to find out the year in which the said amount was paid by the assessee to the party concerned. While doing so, the AO may conduct necessary enquiry with the party concerned so as to find out the previous year in which the liability of the assessee had ceased to exist on account of liquidating the liability by the assessee or on account of cessation of liability as per decision taken by the party concerned, as the case may be. In case of any adverse finding, the assessee may be provided with an opportunity of being heard. 7. In case of M/s Sharma Electricals Iron Works, the ld. CIT(A) after considering the facts and circumstances of the case deleted the addition made by the Assessing Officer to the extent of Rs.3,00,000/- being opening balance, however, confirmed the addition of balance outstanding of Rs.5,70,785/-. The assessee is not aggrieved by the above action of the CIT(A) in respect of the said party. 8. In case of M/s Quality Udyog, the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the party concerned. While doing so, the AO may conduct necessary enquiry with the party concerned so as to find out the previous year in which the liability of the assessee had ceased to exist on account of liquidating the liability by the assessee or on account of cessation of liability as per decision taken by the party concerned, as the case may be. In case of any adverse finding, the assessee may be provided with an opportunity of being heard. 9. In case of M/s Swastik Trading Mfg. Co., since the notices issued to the said party has also been returned unserved with the remark of postal authority as unknown , therefore, the similar directions as was issued in the case of M/s Quality Udyog, was issued by the CIT(A), which, for the sake of ready reference, are reproduced as under: 6.39 Coming to the issue of assessability of brought forward opening balance which is also appearing as closing balance as on 31.03.2014, as the income of the assessee either u/s.68 or u/s.41(1) of the Act, I have already adjudicated the matter in detail vide Para Nos.6.12 to 6.20 above. Accordingly, I am of the considered opinion that the addition made by the AO cannot be sustaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of directions of the CIT(A) in restoring the matter to the file of the Assessing Officer for further investigation in respect of three parties as discussed above. The main argument of the ld. counsel for the assessee has been that since the ld. CIT(A) had deleted the addition made by the Assessing Officer, therefore, further action of the CIT(A) in directing the Assessing Officer to make further enquiries was not sustainable. We are unable to accept the aforesaid contentions of the ld. AR. In this case, in respect of one party i.e M/s Goodwill Corporation, earlier the said party had stated that it had done no transaction with the assessee, but later on, though, accepted that there were business transactions but denied any outstanding credit towards the assessee. Under the circumstances, when the creditor himself has stated that the assessee did not owe any liability to him, there seems no liability remaining of the assessee towards said party. However, the ld. CIT(A), to give fair chance to the assessee, has directed the Assessing Officer to make enquiries in respect of said liability shown by the assessee as noted above. Similarly, in respect of other two parties, the notices s ..... 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