TaxTMI 
TaxTMI 
2014 (4) TMI 934
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....cases enquiry letters were received back unserved and, in some cases, it was mentioned by the party that there was no business transactions during the year. 2.1 The A.O. further vide notice dated 04.08.2010 intimated the assessee that the notices sent u/s 133(6) of the Act to seven debtors exceeding Rs.50,000/- were received back unserved as under:- S.No. Name of the debtor Amount 1. M/s R.B. Drug Agencies Rs. 52,407/- 2. Dr. V.P. Singhal Rs.1,01,995/- 3. M/s Suresh & Company Rs,1,55,922/- 4. M/s Anand Medical Store Rs.2,30,934/- 5. M/s.Perfect Health Care Rs. 89,608/- 6. M/s Retech Formulation (P) Ltd Rs. 71,357/- 7. M/s Gadaxo Pharmaceuticals Rs.1,29,242/- Rs.8,31,465/- 2.2 In response, the assessee submitted that he would furnish complete address and confirmation letters of the parties. It was further contended that some confirmations were still awaited, therefore, the assessee requested the A.O. to wait for the reply from such parties and in case there was no response from the parties, it would provide requisite details. 2.3 The A.O. vide notice dated 31.08.2010 intimated the....
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....ide reply dated 26.10.2010 furnished copies of confirmations of the following parties:- (i) R.B. Drug Agencies, Kanpur (ii) Dr. U.P. Singhal, Ghaziabad (iii) M/s Suresh & Co., Agra (iv) Anand Medical Store, Agra (v) Perfect Health Care, Agra (vi) Rodec Pharmaceuticals (P) Ltd., Ghaziabad (vii) Gadaxo Pharmaceuticals, Ghaziabad 2.8 The assessee also furnished copy of bill and bility of M/s Krishna Distributors to establish that the closing balance as per his books was actually at Rs.65,509/- as against Nil by the aforesaid party. It was further contended that it was incorrect to say that no business was done with the debtor M/s Raman Medical Agency. The assessee also filed bill of M/s Ajay Medical Agencies who intimated that no transaction was made during the year. The assessee vide written submissions dated 28.10.2010 submitted copies of accounts for A.Y. 2009-10 of the following parties:- (i) M/s Narain Distributors (ii) Mis Kanuja Medicine (iii) M/s Shakti Medical Agency (iv) M/s Yashoda Hospital &nbs....
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....hases. The bogus debtor also helped the businessmen to introduce cash whenever required by showing realization of debt. From the above reasons it was held by the A.O. that the assessee made unexplained investment in the garb of bogus debtors. Thus the sundry debtors totaling to Rs.34,51,095/- were held as unexplained and added to the income of the assessee u/s 68 of the Act. 3. Before the Ld. CIT (A), the assessee furnished written submissions, which were forwarded by the Ld. CIT (A) to the Assessing Officer vide letter dated 28.06.2011, asking for a remand report. The Assessing Officer furnished remand report vide letter dated 28.06.2011. The assessee filed a rejoinder to the remand report filed by the Assessing Officer. It was after considering all this, that the Ld. CIT (A) deleted the addition made by the assessee. 4. Before us, the Ld. DR has contended that the Ld. CIT (A) has erred in deleting the addition correctly made by the Assessing Officer u/s 68 of the Act on account of unexplained sundry debtors without appreciating the full facts of the case; that the Ld. CIT (A) also erred in not considering the request made by the Assessing Officer in the remand report to the....
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....ebtors cannot be added either u/s 68 or u/s 69 of the Act, particularly when the assessee has made debit entries in his books of account. So much so, even the remand report submitted by the Assessing Officer is eloquent in this matter, which report is a report of admission, if at all, the provisions of Section 41 (1) of the Act could have been sought to be invoked. However, as per the remand report itself, even the provisions of Section 41 (1) of the Act are not applicable. So far as regards the issue of verification of purchases, as correctly pointed out on behalf of the assessee, the purchases have been verified, as is evident from a perusal of page 16 of the impugned order. 9. The Ld. CIT (A) has correctly observed as follows while correctly deleting the additions made:- "It is observed that the addition in appellant's income could not be made on the basis of apprehensions as done by the A.O. At the most these apprehensions may be a 'lead' for further investigation so-as-to establish the actual fact. The A.O. has not carried out any investigation on such lines. If it is presumed by him that the sundry debtors of Rs.1,23,16,915/- being a specified person could ....