TaxTMI 
TaxTMI 
2010 (6) TMI 762
X X X X Extracts X X X X
X X X X Extracts X X X X
....in law, the ld. CIT(A.) has erred in deleting the addition on account of disallowance u/s. 40A(2)(b) of the Act of Rs. 36,62,765/-. (2) On the facts and circumstances of the case and in law, the ld. CIT(A.)has erred in deleting the addition on account of unexplained creditors of Rs. 2,55,110/-. (3) On the facts and circumstances of the case, the ld. CIT(A.) ought to have upheld the order of the Assessing Officer. (4) It is, therefore, prayed that the order of the CIT(A.) be set aside and that of Assessing Officer be restored. 2. None appeared on behalf of the assessee, when the case was called for hearing. Though a written submission dated 22.04.2010 was filed by the Director of the assessee-company. Therefore, we have decided t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Corporation reported in 24 TTJ 571. Aggrieved by the order of ld. CIT(A.), the Revenue is in appeal before the Tribunal. 5. In the assessment order, the Assessing Officer also disallowed the amounts of 2,55,110/- in respect of sundry creditors on the ground that these amounts shown in the balance-sheet were outstanding for more than three years. The Assessing Officer in the assessment order also stated that the assessee has not furnished complete address, confirmation or any evidence regarding the nature of dispute for justifying the reasons of outstanding amount in respect of sundry creditors for more than three years. On appeal, the ld. CIT(A.) deleted the said disallowance following the judgment of the Hon'ble Apex Court in the ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he provisions of section 40A(2)(b) of the Income Tax Act, 1961 and the ld. CIT(A.) is not justified in deleting the same. 7. In the written submission, the assessee contended that the Assessing Officer made adhoc 10% disallowance on the plea that no comparative rates were given out of total work of Rs. 3.66 crores. It was submitted that it is the duty of the Assessing Officer to pin point excessive rates, if any, before coming to the conclusion that market rate is lower than the payment made to sister concerns. No such exercise has been done by the Assessing Officer. It was further contended that on similar facts and circumstances of the case, ITAT, Ahmedabad Bench in ITA No. 4117/Ahd/2007 for AY 2004-05 vide order dated 01.06.2008 and I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d every entry appearing in the books of accounts to the satisfaction of Assessing Officer. Despite sufficient opportunity afforded by the Assessing Officer, the assessee failed to do so. Therefore, disallowance of Rs. 2,55,110/- on account of unexplained creditors was rightly made by the Assessing Officer by invoking the provisions contained in section 40A(2)(b) of the Income Tax Act, 1961. As against this, in the written submission the assessee contended that the creditors were disputed in nature and, therefore, they were not offered to tax under section 41(1) of the Act. It was further pointed out that recently ITAT, Ahmedabad in the case of assessee's sister concern viz. Himson Fadis Machinery Pvt. Ltd. allowed the appeal vide para 14 fo....