TaxTMI 
TaxTMI 
2016 (3) TMI 585
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....differences appeared on account of transactions made with M/s. Ram Swarup Industrial Corporation. 2. That the Ld. CIT(A) erred in deleting the addition of Rs. 21,87,82,482/- without controvert the findings of the A.O. that the assessee company failed to reconcile the difference by producing supporting evidences. 3. That the Ld. CIT(A) erred while delivering the judgment without appreciating the cannons of judgment that the onus to prove the transactions was on assessee company. 4. That the Ld. CIT(A) erred in deleting the addition of Rs. 21.87 Crore without allowing the opportunity to the A.O to verify the contents of the paper book filed by the assessee during the appellate stage." 3. Briefly stated facts are that during the course of assessment proceedings, on going through the details of sundry creditors, the AO noticed that there is substantial difference in the Balance Sheet as shown by the assessee and as seen from ledger account submitted by the creditor M/s. Ram Swarup Industrial Corporation (hereinafter RSIC). In response to notice u/s. 133(6) of the Act, the creditor RSIC showing the credit balance at Rs. 22,96,80,435/- as on 31.03.2006 as ag....
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..... The assessee has also furnished the copy of account in the books of M/s Ram Swarup Industrial Corporation which was obtained by assessee in the inspection of the assessment records before filing of appeal. The assessee also furnished the copy of affidavit filed before the assessing Officer regarding denial of payment of Rs. 14 crore made by the appellant company to M/s Ram Swarup Industrial Corporation and denial of transaction of Rs. 7,87,82,482/-. The assessee has also produced annual balance sheet and Profit & Loss a/c along with Audit Report in the paper book. After careful consideration of the written submission, assessment order, remand report and counter comments of the assessee, it is noticed that the transaction of Rs. 14 crore as on 31.03.2006 was reversed by M/s Ram Swarup Industrial Corporation in the months July and October, 2006 (page 158 of the paper book which is nothing but part of the ledger alc of the assessee in the books of M/s Ram Swarup Industrial Corporation, whose certified copy was given to the assessee before filing of the appeal). The assessee company had produced the copy of the bank account maintained by it in the Bank of India. The counter ....
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....d by the appellant even at the assessment stage, no evidence in form of road challans and accepted bills was produced before the Assessing Officer. Keeping in view the above facts and circumstances, the addition of difference amount of Rs. 7,87,82,482/- was made by the Assessing Officer on the basis of conjectures and surmises and without any evidence. Therefore, the ground no. 4 is allowed." Aggrieved, now revenue is in appeal before the Tribunal. 4. We have heard rival submissions and gone through facts and circumstances of the case. During the scrutiny assessment proceedings, the reconciliation statement along with the relevant documents in support were filed by the assessee-company and an affidavit was also filed claiming that the balance as reflected in the books of account of the assessee vis-à-vis the books of account of RSIC as reflected in their books, were as per entries in the regular books of account and the reconciliation statement was in confirmatory with the books of accounts of assessee. We find from the facts of the case that as per the books of RSIC showed a closing credit balance of Rs. 1,08,97,953/- as on 31.03.2006 in the name of the assessee. Furt....
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....C in the books of assessee, and Paper Book page 180 being the Debit A/c of assessee in RSIC. Two sale bills on 28th March 2006 of Rs. 28,60,000/- each was wrongly entered by assessee in their Ledger as Rs. 2,86,000/- and Rs. 28,60,000/- which was subsequently rectified by the parties in the next year. As regard to the entries where RSIC has shown as sales by them totaling to Rs. 1,54,78,255/- and the assessee has categorically denied that they have not received any such materials under the bill nos. and the quantity and amount as mentioned in the reconciliation as alleged by the party. 6. We further find from the reconciliation filed by the assessee and the explanation that no opportunity of cross-examination was provided to the assessee despite the fact that it was only on the statement of the Chief Finance Controller, the AO relied upon his statement and made addition of Rs. 2l.88 crores. The AO nowhere asked RSIC to produce the bills and the evidence of delivery of the material i.e. Road Challan and accepted Challan copy by assessee of the materials as alleged to have been sold by them. No enquiry whatsoever was made by the AO and it was simply on the statement of Sri Navin G....
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....s reconciliation with M/s Ramswarup Industrial Corporation for the year under consideration i.e. F.Y. 05-06. Further, the assessee-co, submitted as affidavit on 30.12.08 contending that the alleged payment of Rs. 14 crores on 31.03.2006 has credited by the M/s Ramswarup Industrial Corporation in their books was never made by the assessee-co. Further, the assessee-co. also contended that the transactions amounting to Rs. 1,59,14,691/- on various dates, amounting to Rs. 2,88,60,143/- has wrongly debited to the assessee's accounts. The crux of the mater under consideration is that the Ld. AO has the opportunity to cross verify the reconciliation as submitted by the assessee-co. and for that the CFO of M/s. Ramswarup Industrial Corporation, Sri Naveen Gupta, was produced by the assessee-co. himself before the A.O. The statements of Naveen Gupta, CFO were recorded wherein he deferred that differed to what the assessee has stated its affidavit, ibid. Sri Gupta, stated that the cheques were actually received by them on 31.03.2006 and that is why the amounts were credited. He has stated that the cheques were received but cheques No. has been mentioned in the ledger a/....
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....edit balance as reflected by assessee in their books is Rs. 22,96,80,435/-. (It is this difference between the closing balance as reflected by RSIC and as per the books of assessee has been added back by the AO). In the reconciliation statement, the first entry as payment shown by RSIC is of Rs. 14,00,00,000/-. In the affidavit filed by assessee which is at assessee's Paper Book pages 113 & 114, it was clearly mentioned that, no such payment has been made by assessee to RSIC which they have alleged. From the ledger account of RSIC for the subsequent year, the said amount of Rs. 14,00,00,000/- have been reversed by them on Ist July 2006 and Ist October, 2006. This fact is verified from assessee's Paper Book page 158. 9. Further, next amount in the reconciliation statement is Rs. 9,37,42,597.69 for which it has been stated that RSIC has transferred this sum to the credit account from their Debtor A/c of assessee to the Creditor A/c of assessee in their books. This is verified from assessee's paper book page 180 being Debtor A/c of assessee in RSIC books (where on 31st March 2006 they have internally transferred from the Debtor A/c to the Creditor A/c the said sum). The credit Ledg....