Tribunal remits issue back to Assessing Officer after assessee provides evidence. Order set aside, appeal allowed.

The Tribunal remitted the issue back to the Assessing Officer for fresh consideration after the assessee provided confirmation letters and opening balances for unproved creditors. The impugned order was set aside, and the appeal of the assessee was allowed for statistical purposes.

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Issues:
Assessment of unproved creditors under section 68 based on lack of confirmation letters from concerned parties.

Analysis:
The appeal filed by the assessee challenges the order of the Commissioner of Income-tax (Appeals) for the assessment year 2009-10. The assessee, engaged in manufacturing and exporting hosiery garments, declared income of Rs. 8,61,110 in the return filed on March 25, 2011. The Assessing Officer noted sundry creditors amounting to Rs. 1,73,86,730 during scrutiny assessment. Letters were sent to verify the genuineness of these creditors, but most were returned undelivered. Addition under section 68 was made for four parties as unproved creditors, totaling Rs. 79,08,671. The Commissioner of Income-tax (Appeals) dismissed the appeal due to the lack of confirmations from the parties.

The assessee, now in second appeal before the Tribunal, argued that they were not given sufficient opportunity to furnish confirmation letters. Confirmation letters were obtained post-appeal, along with details of opening balance. The Department contended that no confirmations were provided earlier and cited legal precedents to support dismissal. The Tribunal considered additional evidence submitted by the assessee, comprising confirmation letters and registration certificates from creditors. The Department opposed this evidence, citing previous cases of non-cooperation by taxpayers.

The Tribunal found that the assessee faced difficulties in obtaining confirmation letters in time, unlike cases cited by the Department. Confirmations were now available, prompting a revisit to the Assessing Officer for verification. The issue was remitted back to the Assessing Officer for fresh consideration, taking into account the confirmation letters and opening balances. Consequently, the impugned order was set aside, and the appeal of the assessee was allowed for statistical purposes.

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