Section 68 addition deleted where account records, confirmations and remand findings supported the genuineness of sundry creditors.

Section 68 addition for sundry creditors and unexplained cash credits was deleted where the assessee produced account copies, bills, confirmations, proof of payment and VAT returns. The purchase bills for the relevant period were verified in remand proceedings, and the Assessing Officer did not record any adverse remark or bring any adverse material against the creditors. As the remand report accepted the genuineness of the transactions, there was no basis to sustain the addition, and the Revenue's challenge failed.

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Issues: Whether the addition made under section 68 on account of sundry creditors and unexplained cash credits was sustainable when the assessee had furnished supporting records and the remand report did not record any adverse finding.

Analysis: The assessee had produced account copies, bills, confirmations, proof of payment and VAT returns. The original purchase bills for the relevant period were examined in remand proceedings, and the Assessing Officer did not record any adverse remarks or bring on record adverse material against the sundry creditors. The remand report accepted the genuineness of the transactions, leaving no basis for sustaining the addition.

Conclusion: The addition under section 68 was rightly deleted, and the Revenue's challenge failed.

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