Tribunal upholds rulings on revenue appeals for AY 2012-13, confirms deletions & restrictions

The appeals of the revenue for Assessment Year 2012-13 in I.T.A. No.233/Ind/2017 and I.T.A. No.234/Ind/2017 were dismissed. The Tribunal upheld the findings of the Ld. CIT(A), confirming the deletions and restrictions of additions made by the AO regarding sundry creditors and profit estimations. The orders were pronounced on 06.12.2018.

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Issues Involved:
1. Restriction of addition in respect of sundry creditors.
2. Deletion of addition based on creditors.
3. Acceptance of additional evidence without following Rule 46A.
4. Deletion of addition made on account of profit estimated by A.O.

Detailed Analysis:

I.T.A. No.233/Ind/2017 - Shri Kishore Hariram Paryani (HUF):
1. Restriction of Addition in Respect of Sundry Creditors:
- The Ld. CIT(A) restricted the addition to Rs. 23,573 as against the addition of Rs. 2,39,33,988 for unexplained sundry creditors. The Ld. CIT(A) found that the AO had called for information under section 133(6) from the creditor, Shivalik Vyapar Pvt. Ltd, which confirmed the balances except for a minor difference of Rs. 23,573 due to commission discrepancies. Thus, the Ld. CIT(A) concluded that the addition should be limited to the minor discrepancy amount.

2. Deletion of Addition Based on Creditors:
- The Ld. CIT(A) deleted the addition of Rs. 68,28,938. The AO had observed a discrepancy between the balance shown by Shivalik Vyapar Pvt. Ltd and the assessee’s books. However, the Ld. CIT(A) found that the discrepancy was due to a journal entry related to Bank of Baroda LC, which did not affect the actual balance between the parties. The Ld. CIT(A) thus concluded that no addition was warranted.

3. Acceptance of Additional Evidence Without Following Rule 46A:
- The revenue contended that the Ld. CIT(A) accepted additional evidence without following Rule 46A. However, the Tribunal found that all necessary details were directly called for by the AO under section 133(6) and were duly complied with. Therefore, the Tribunal dismissed this ground.

4. Deletion of Addition Made on Account of Profit Estimated by A.O.:
- This ground was general in nature and required no specific adjudication, thus it was dismissed.

I.T.A. No.234/Ind/2017 - Shri Prince Paryani:
1. Deletion of Addition on Account of Creditors:
- The Ld. CIT(A) deleted the addition of Rs. 2,44,74,156. The AO had made an addition assuming a discrepancy between the balance shown by Shivalik Vyapar Pvt. Ltd and the assessee’s books. The Ld. CIT(A) found that the AO had compared different accounts incorrectly and that the balances actually matched. Thus, the Ld. CIT(A) concluded that no addition was warranted.

2. Deletion of Addition of Rs. 38,49,923 on Account of Creditors:
- The AO had made an addition for five sundry creditors under section 68. The Ld. CIT(A) deleted this addition after examining the confirmations of amounts from all five creditors and verifying that payments were made through banking channels in the succeeding financial year. Thus, the Ld. CIT(A) found no discrepancy warranting the addition.

3. Acceptance of Additional Evidence Without Following Rule 46A:
- Similar to the case of Shri Kishore Hariram Paryani (HUF), the Tribunal found that the necessary details were directly called for by the AO and were duly complied with. Therefore, this ground was dismissed.

4. Deletion of Addition Made on Account of Profit Estimated by A.O.:
- This ground was general in nature and required no specific adjudication, thus it was dismissed.

Conclusion:
Both appeals of the revenue (ITA No.233/Ind/2017 and ITA No.234/Ind/2017) for Assessment Year 2012-13 were dismissed. The Tribunal upheld the findings of the Ld. CIT(A) in all respects, confirming the deletions and restrictions of additions made by the AO. The order was pronounced in the open Court on 06.12.2018.

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