2016 (1) TMI 531

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....urchase and sale of gold jewellery. Sundry creditors to the tune of Rs. 40,20,234/- were shown in the accounts. On being called upon to furnish their details, the assessee submitted the details, which have been reproduced on pages 5 and 6 of the assessment order. The assessee stated that these were not the creditors in the strict sense, but, the customers who sold their old ornaments. In support of the genuineness of these credits, the assessee submitted that the jewellery purchased from them was sold to her sole customer, namely, M/s Nikki Jewellers House, from whom the payment was stuck up. The assessee submitted that the amount was received from M/s Nikki Jewellers House and then paid to these customers in the immediately succeeding year....

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....ned order with any cogent material. The three persons who were examined by the AO duly admitted that they had sold their jewellery to the assessee. The AO has doubted the genuineness of transactions with them by holding that they were persons of no means. When we peruse the details of amounts appearing against these persons, it is found that the same ranged between Rs. 1 lac to Rs. 2 lac. The fact that confirmation from all the creditors were filed along with the affidavit filed by the assessee's husband averring their production before the AO who refused to examine and other attending circumstances go to prove the genuineness of the transactions of purchase of gold jewellery by the assessee from them. Immediate payment could not be made to....

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....ed before the AO that a sum of Rs. 11.14 lac represented brought forward balances, but, the AO did not find any closing balances of unsecured loans in the return for the immediately preceding year. The ld. AR did not readily have the balance sheet of the preceding year to amplify his contention about such brought forward balances. In our considered opinion, this fact is of utmost importance which requires examination at the AO's end. We, therefore, set aside the impugned order and send the matter back to the file of AO for deciding this issue afresh as per law, after allowing a reasonable opportunity of being heard to the assessee. In case it is found that unsecured loans amounting to Rs. 11,14,926/- were brought forward balances from the l....