TaxTMI 
TaxTMI 
2013 (9) TMI 8
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....order itself that these creditors have static balance for the three years. 3 (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs.13,79,077/ - on account of trade creditors, namely Researchco Books & Scientific International. (ii) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition in the income of the assessee in year under consideration despite stating in the order itself that these creditors have static balance for the three years. 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition ignoring the fact that the addition has been made relying upon the information collected under Section 136 without giving opportunity to the assessee of cross examination and rebutting the same. 5 (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the disallowance of an amount of Rs.6,34,421/- being 1/10th of the expenses incurred by the assessee on car and telephone. S. No. Particulars Am....
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....hy both these creditors be not treated as bogus and the balance be not added to the assessee's total income. As per the assessment order, the assessee did not offer any explanation. It was therefore, that an amount of Rs. 20,21,684/- was added by the AO to the income of the assessee. The ld. CIT (A) confirmed this addition. 6. In respect of the other two creditors, i.e., Researchco Books and Scientific International, these parties did not file any reply before the AO. The AO, as such, added the balance of Rs. 13,79,077/- outstanding in the assessee's books in the name of these two parties, to the total income of the assessee. The ld. CIT (A) confirmed this addition also. 7. The ld. Counsel for the assessee has contended before us that the ld. CIT (A) has erred in confirming these additions, despite observing in the impugned order itself that these creditors had static balance for the three years; that while illegally confirming the additions, the ld. CIT (A) has erred in failing to consider the fact that the first addition was made relying on information collected u/s 133 (6) of the Act, without affording any opportunity of cross-examination and rebuttal to the assessee. It h....
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.... year under consideration) (APB 35-41). The details of the four parties in question are to be found at APB 39 & 40. A list of the assessee's sundry creditors as on 31.03.2008 (AY 2008-09) as filed before the AO, is at APB 65-76. The fact that the same balances qua the parties in question are continuing is evident from a perusal of APB 73-76. The same is the position with regard to the sundry creditors as on 31.03.2007 (APB 82-92), for AY 2007-08. It has been contended that as correctly and concurrently by both the taxing authorities, the assessee miserably failed to prove the genuineness of the sundry creditors inasmuch as, even the confirmation from any other parties was not filed; that Students Book Depot, Ranchi and Unicate Publishers and Distributors, Pune, had specifically stated in their respective replies that during the year, they did not have any transaction with the assessee; Researchco Books and Scientific International did not even filed replies before the AO, indicating that they had nothing to offer in response to the notice issued to them u/s 133 (6) of the Act; that therefore, the ld. CIT (A) has rightly confirmed the addition made and that there being no merit what....
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....served, since the purchases have been accepted as genuine, balances remaining outstanding at the end of the year against such purchase cannot be treated as a bogus liability and addition made on that basis cannot be sustained as held in 'JCIT vs. Mathura Dass Ashok Kumar', 101 TTJ (All) 810. In 'CIT vs. Smt. P.K. Noorjehan', 237 ITR 570 (SC), it has been held that as per the provisions of Section 68 of the Act, it is not mandatory that in case the assessee fails to satisfy the Assessing Officer about the outstanding credits, the same are mandatorily required to be added as income of the assessee and that Section 68 of the Act gives a discretion of the Assessing Officer in this regard; and that the Assessing Officer has to take into account the overall facts. In the present case, as discussed, on considering the facts of the case, the provisions of Section 68 of the Act are not attracted and considering the overall facts, no addition is called for under the Section. 13. Further, as considered in the order dated 30.09.2011 passed by this Bench (authored by the JM) in the case of 'M/s Divine International' for Assessment Year 2001-02, in the case of the assessee these creditors rep....
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....t (Disallowed) Rs. 1. 1/10 of car maintenance expenses of 7,10,692/- 71,069/- 2. 1/ 10 of telephone expenses of Rs. 4,10,154/ - 41,015/- 3. 1/10 of travelling expenses of Rs.44,45,307/- 1,00,000/- 4. Car Depreciation Expenses (a) 1/10 of Car Audi depreciation of Rs.4,72,144/- 4,7214/- (b) 1/10 of Car Lancer depreciation of Rs.20,284/- 2,028/- (c) 1/10 of Car Mercedes depreciation of Rs.1,49,087/- 14,908/- (d) 1/10 of Car Honda depreciation of Rs.1,09,782/- 10,978/- (e) 1/10 of Car Honda City depreciation of Rs.81,475/- 8,147/- (f) 1/10 of Car Mercedes depreciation of Rs.4,17,226/- 41,722/- (g) 1 / 10 of Car Maruti depreciation of Rs. 7, 421/ - 742/- (h) 1/10 of Car Safari depreciation of Rs.95,759/- 9,575/- Total 6,34,421/- 18. The disallowance was made by the Assessing Officer, treating the user of the car and the telephone by the assessee to be of a personal nature. The Ld. CIT (A) confirmed the disallowance. 19. The ld. counsel for the assessee has contended that all the expenses have been incurred wholly and exclusively for the purpose of busi....