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TMI Blog2015 (5) TMI 1256X X X X Extracts X X X X X X X X Extracts X X X X ..... se and Jiargee Corporation totaling to Rs.29,35,211/- and for this the AO issued notice under section 133(6) to these parties on 15.10.2009, which got returned back by the postal department with the marking as "Not known". The AO noted that these parties were shown as creditors from financial year 2005-06 i.e., assessment year 2006-07 and continued as such. The AO subsequently deputed the Inspector, who submitted in his report that he made the local enquiry but he was told that these parties are not situated there. He, therefore, asked the assessee to contradict the report of the inspector. The AO, therefore, treated these sundry creditors, which were coming from the earlier year as bogus creditors and added in the income of the assessee. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deleting the addition of sundry creditors, which did not arise during the impugned assessment order in their opening balance from the earlier assessment year 2005-06. As per the provisions of section 68, any amount found credited in the books of assessee can be added in the previous year relevant to the assessment year, in case, the assessee fails to prove the nature and source of such credit, in which these amounts arose are credited. Since the amounts were not credited in the impugned A.Y., therefore, in view of the decision of the Hon'ble Karnataka High Court in the case of CIT-vs- Sridev Enterprises 192 ITR 165, we confirm the order of the CIT(A) deleting the said addition. 4. Ground no.2 relates to the deletion of addition of Rs.29,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are reflected in the Bank Account of the Appellant in the relevant financial year i.e. in the next year. It has also been mentioned by the Appellant in response to Remand Report that this party could not be produced during Assessment Proceedings as it had closed its business. In respect of the transactions with M/s Shib Shankar Trading Co., whose Proprietor, Shri Anil Biswakarma's statement was recorded by the A.O. It is seen that during the year against purchase of Rs.16,69,553/- as well as the purchases made during 01.04.2007 to 31.03.2008 payment of Rs.32,90,243/- had been made in the same period and there was only a balance of Rs.86,173/- on 31.03.2008 and that these payments are reflected in the Bank Accounts of the Appellant. The A.O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the purchases made including payment against these purchases in the subsequent Financial Year. The A.O has not probed further in respect of the payments claimed to have been sown against the purchases in the next financial year as to whether this payments were genuine as claimed by the Appellant Further, in a trading business even otherwise the entire purchases cannot be disallowed as sale against such purchases is being shown by the Appellant whereas profit has not been estimated nor have the Appellant's books of accounts been rejected. It is clear that in case of trading the rejection of purchases would impact the sales and this fact has been ignored by the AO. Therefore even if the submissions of the Appellant are only cor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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