TaxTMI 
TaxTMI 
2012 (7) TMI 721
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....he addition of Rs.1,34,86,495/- on account of undisclosed income made by the AO. 2. On the facts and circumstances of the case and in law, the ld. CIT(A) has erred by accepting additional evidences u/s 46A filed by the assessee during the appellate proceedings which were not produced before the AO during the assessment proceeding." 3. Briefly stated the facts of the case are that the return of the assessee was processed u/s 143(1) of the Income Tax Act, 1961 and subsequently, this case was selected for scrutiny under CASS. On service of notices, assessee's representative filed necessary details which were taken on record by the AO and he also examined the books of account of the assessee on test checked basis. The AO accepted trading ....
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....rties in the light of material placed before us on record. Ld. DR supported the action of the AO and submitted that the burden to prove the genuineness of transactions and creditworthiness of the creditors, as shown in the books of account, was on the assessee but he failed to comply with the same. Hence, the AO rightly treated the said credits as unverifiable and unexplained credit balance and consequently added this amount to the income of the assessee as income from undisclosed sources. 6. On the other hand, the AR replying to the above submissions and contended that the action of the AO was not based on reasonable grounds as he ignored and failed to appreciate the fact that amounts stand as credit in accounts of various parties were ....
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....er submission of rejoinder, the ld. CIT(A) held that the assessee succeeded in establishing genuineness and creditworthiness of the creditors. Hence, deletion of addition should be held justified confirming the impugned order. 8. After careful consideration of rival arguments of both the parties and perusal of entire record placed before us, at the outset, we observe that the ld. CIT(A) followed the procedure as laid down by Rule 46A of the Income Tax Rules, 1962 (for short "the Rules") for admitting additional evidence. The ld. CIT(A) called a remand report from the AO and he objected to the admission of additional evidence and also broadly commented on merits of the same (i.e. additional evidence). On this point, we also noted that ....
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....ous creditors requesting them to confirm the balance. However, the creditors did not respond before the hearing proceedings were closed. The appellant had no control over the creditors which also included large organizations such as Steel Authority of India Ltd., Hindustan Zinc Ltd., Hindustan Dorr Oliver Ltd. etc. The appellant explained this to the learned Assessing Officer." Considering the facts, the additional evidence filed by the appellant is admitted as the conditions laid down in Rule 46A are satisfied in this case. As discussed above, the AO has been given an opportunity in terms of Rule 46A(3) and his remand report has been duly considered. 3.7 The appellant ahs pointed out that its accounts are audited under the Companies ....
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.... Hindustan Dorr Oliver: Rs. 30,70,405/- M/s Zinc Ltd. : Rs. 69,25,408/- The assessee has filed copies of the above accounts appearing in sundry debtors. Account of all the parties have been verified with the copies of account as per assessee's books of account. In the case of M/s Siyaram, the assessee has filed statement of accounts of the said party in their books in the year from 2002- 2003 to 2007-08, wherein all the transactions mentioned in the statements related to the supply of goods by the said party and payments made were verified. The balance of the party's account as on 31.3.08 was NIL. The assessee has also furnished reconciliations of the parties accounts where the balance does not tally which have been gone through." ....
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....serve that the ld. CIT(A) considered relevant documentary evidence and reconciliation of accounts with the creditors and held that in the remand report, the AO had not brought any solid sustainable reason or material on record to show that noted discrepancies had remained unreconciled even after consideration of the documents filed in appellate proceedings as an additional evidence and the AO had also not pointed out any discrepancy which has remained unreconciled in respect of creditors in question which also included M/s Hindustan Dorr Oliver Ltd. and M/s Hindustan Zinc Ltd. Accordingly, the ld. CIT(A) rightly held that the AO had no reason to discard the evidence furnished by the assessee and, on the other hand, the ld. CIT(A) also held ....