TaxTMI 
TaxTMI 
2017 (7) TMI 865
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....K.M. Mishra, Ld. Advocate appeared on behalf of assessee and Shri K.K. Das, Ld. Departmental Representative represented on behalf of Revenue. 2. At the time of hearing Ld. Counsel for the assessee stated that he has directed by assessee not to press ground No.9. Hence, same is dismissed as not pressed. 3. Only effective issue raised by assessee in ground No. 1 to 8 are that Ld. CIT(A) erred in confirming the order of the Assessing Officer by sustaining the disallowance of Rs.1,45,53,427/- due to non verification of sundry creditors. 4. Briefly stated facts are that assessee in the present case is a partnership firm and engaged in the business of civil construction. The assessee in the year under consideration has shown sundry credi....
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.... made by assessee before him confirmed the order of Assessing Officer by observing as under:- "... ... In this assessment year, the ape first submitted a list of 13 sundry creditors which was found to be unverifiable. In fact, some of the creditors replied that they neither had any transactions with the appellant during the relevant Financial Year nor any amount was outstanding at the end of the year. In the appeal proceedings, the appellant has submitted altogether a new list with new names and addresses and outstanding amounts containing 10 names. Under these circumstances, the judgment in the case of assessment year 2006-07 will not be of any assistance to the appellant and the addition on account of sundry creditors is warrante....
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....and suspicion as such the order is bad and liable to quash. 5. For that, the Ld. CIT(A) failed to appreciated the fact that in absence books, addition on account trade creditors could not be made u/s. 68 as the balance sheet and P&L a/c is not books therefore the authority below enlarged the scope of section 68 which is not permissible unless rules of interpretation is applied. 6. For that, the finding recorded by AO and confirmed by CIT(A) to the effect that the appellant has introduced capital to level the assets side of balance sheet is unsupported by evidence because the assessee has not made any undisclosed investment in movable or immovable assets during the year therefore, finding is based on surmise, suspicion and ....
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....ion as above was not satisfactory in the eye of AO; He further stated that it is undisputed fact that the assessment order nowhere says that the books of account were available with the AO. The CIT-A has also noted in order at page-7, para-2 that the books of account were not available. Section 68 of the Act says that if any credit found in the books of account. Since the CIT-A as well as the AO has noted that the books of account were not available therefore no addition u/s. 68 of the Act can be made. The Hon'ble Delhi High Court in the case of CIT Vs. Mrs Mayawati (2011) 338 ITR 563 (Del) has held that the banks statement, balance sheet and profit and loss account is not books of account therefore, addition u/s 68 of the Act cannot....
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....t is not at all attracted and cannot be applied. The AO in fact has applied Sec. 69 of the Act". Further, at concluding paragraph the Hon'ble court held that "we do not agree with the aforesaid conclusion of the tribunal because section 69 is deeming provision provide for treating an unexplained investment made by an as during a Financial Year to be income of the assessee of Financial Year for the purpose of assessment and unless the requirement of section 69 are strictly satisfied by a finding by the AO on relevant materials that assessee had actually made some undisclosed investment during the Financial Year, section 69 cannot be applied. The Hon'ble court therefore deleted the addition." He further cited case law of ITAT Delhi Be....
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....the cash credit which has not been explained by assessee. In the instant case sundry creditors are arising out of the purchases as claimed by assessee which have been duly accepted by the Authorities Below. We also find that the provision of Sec. 41(1) of the Act cannot also be invoked at the same time. It is because the liabilities shown by the assessee have not seized to exist in the books of account. However, it is the duty of the assessee to justify its transaction on the basis of evidence which in the instant case, the assessee has failed to do so. Authorities Below have invoked the provision of Sec. 68 of the Act to tax the sundry creditors whereas the assessee is claiming that the foresaid amount represents the trade creditors and th....