TaxTMI 
TaxTMI 
2015 (7) TMI 446
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.... 1961. 2. The assessee in the present case is an individual which is engaged in the business of trading in granite slabs in the name and style of his proprietary concern M/s. Sri Lakshmi Sai Granites. The return of income for the year under consideration was filed by him on 31.10.2007 declaring loss of Rs. 4,27,117. In the assessment originally completed under section 143(3) of the Act vide order dated 30.10.2009, the total income of the assessee was computed by the A.O. at Rs. 7,35,600. The record of the said assessment came to be subsequently examined by the Ld.CIT and on such examination, he found that the assessment order passed by the A.O. under section 143(3) was erroneous as well as prejudicial to the interests of the Revenue inter ....
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....with section 263 vide order dated 21.03.2012. 3. Against the order passed by the A.O. under section 143(3) read with section 263, an appeal was preferred by the assessee before the Ld. CIT(A) and after considering the submissions made by the assessee as well as the material placed on record before him, the Ld. CIT(A) deleted both the additions of Rs. 5,23,930 on account of unexplained investment made in the capital and Rs. 40,95,286 made on account of unproved sundry creditors by the A.O. for the following reasons given in paras 4A and 4B of his impugned order. "4A. Inasmuch as investment from HUF status is concerned, it is explained by the appellant that the proprietary concern by name M/s. Sri Lakshmi Sai Granites, Bandi Ashok HUF has i....
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....rdingly, the A.O. is directed to delete the same." 4. Aggrieved by the order of the Ld. CIT(A) giving relief to the assessee as above, the Revenue has preferred this appeal before the Tribunal on the following grounds : a. "The Ld. CIT(A) erred in law and facts of the case in holding that the sources for introducing fresh capital by the assessee for the year under consideration is from out of the cash available in his HUF status, whereas the assessee could not establish the same, before the A.O. with reasonable explanation. b. Whether the Ld. CIT(A) is correct in holding that the assessee has explained the source satisfactorily when there is no evidence to that extent in accounts maintained with respect to investment from HUF status. c.....
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....on account of unexplained investment in the capital, it is observed that although, source of the said capital was claimed by the assessee to be the funds received from HUF, the same was not substantiated by the assessee before the A.O. by furnishing relevant documentary evidence and details. A perusal of the impugned order of the Ld. CIT(A) also shows that the explanation of the assessee as regards the source of capital being the funds received from HUF was accepted by him merely on the basis of the submission of the assessee that the HUF is regularly assessed to tax without there being any documentary evidence to support and substantiate the claim of the assessee that the amount of Rs. 5,32,930 was actually received from the HUF and that t....
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....ails filed by the assessee for the first time before him showing that the balances outstanding as on 31st March, 2007 against the concerned creditors were paid in the subsequent years through cheques or DDs. As rightly pointed out by the learned D.R. from the relevant portion of the impugned order of the Ld. CIT(A), finding in this regard was given by the Ld. CIT(A) only in respect of 5 creditors out of the 13 creditors and that too without giving any opportunity to the A.O. to verify the claim of the assessee made before him for the first time that the relevant sundry creditors having been fully paid in the subsequent years, the existence of the said creditors was proved. Ld. Counsel for the assessee has also not been able to dispute this ....