2016 (6) TMI 1223

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....s made as well as the legal and factual position on the issue have not been appreciated. (b) The addition of Rs. 83,17,322/- representing the cost of material purchase including transportation charges and appearing as credit balances could not have been sustained u/s 68. 2. That the ld. CIT(A), has erred in refusing to admit additional evidence in the shape of affidavits of certain Truck Drivers filed during the appellate proceedings." 2. The brief facts of the cases are that the assessee is a contractor engaged in road construction/repair. During the year, the assessee had made purchases of material and the amount outstanding to suppliers was reflected in terms of the truck number. Such creditors were Rs. 83,13,191/- a....

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....given to support the contention that the creditors could not be paid immediately. The explanation given by the assessee was not accepted by the AO by stating the following reasons: 1) The assessee had failed to prove genuineness of credits in the name of vehicle owners and the summons were not served on the creditors and the assessee did not produce the creditors. 2) The expenditure of Freight, Octroi & Cartage is higher is the last quarter. Expense up to Dec., 2008 is with reference to persons whereas the subsequent expense is with reference to truck numbers. Also excess expenditure appears to have been incurred to evade tax. 3) Confirmations of credit balances in the name of the vehicle numbers are not genuine a....

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....sment years, no such addition has been made. 5. The ld. DR, on the other hand, forcefully relying on the impugned order, has contended that mere entries were made by the assessee and no material whatsoever was supplied and, therefore, the provisions of section 68 of the Act are squarely attracted and were rightly applied. 6. Having heard the rival contentions in the light of the material available on record, it is seen that in para-3 of the assessment order, the AO observed that the assessee had shown numerous sundry creditors along with details, as was available from the examination of the assessee's books of account vis-à-vis his balance sheet. The assessee is a road contractor. He received material for the construction of th....