TaxTMI 
TaxTMI 
2019 (5) TMI 1130
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....y the learned Tribunal dismissed the Revenue's Appeals and upheld the order passed by the learned Commissioner of Income Tax (Appeals) dated 8.5.2017 for the Assessment Year 2014-2015. 2. The suggested substantial questions of law are quoted below for ready reference:- "i) Whether the ITAT is right in deleting the addition made under Section 68 of the Income tax Act when the assessee could not explain the advance received from M/s.Kannan Enterprises, Kollam? ii) Whether the ITAT is right in law in upholding the order of the CIT (A) who admitted return of income of the creditor M/s.Kannan Enterprises, Kollam, which was not produced before the Assessing Officer, as additional evidence without giving an opportunity to ....
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....his fact was brought to the notice of the Assessing Officer by letter dated 19.12.2016. It was claimed in the above letter that for the purpose of availing loans from financial institutions, the appellant required more capital and, therefore, in order to enhance the credit limit, the appellant accounted the purchase advance received from M/s.Kannan Enterprises, kollam in the capital account. It was also submitted that whenever raw nuts are supplied to M/s.Kannan Enterprises, Kollam, the same would be adjusted and it would be debited to capital account. He further submitted that the Assessing Officer had issued letter under Section 133(6) dated 2.12.2016 to M/s.Kannan Enterprises, Kollam in response to the same M/s.Kannan Enterprises, Kollam....
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.... given by the said M/s.Kannan Enterprises were made from time to time as advances against purchase of Cashewnuts from the Assessees and such amounts tallied with the credit entires made by the Assessee. The relevant observation of the Commissioner of Income Tax (Appeals) in Para 3.3.1 of the order is also quoted below for ready reference:- "3.3.1. From the above, it is seen that the Assessing Officer has conducted due verification with creditor, who had confirmed the same alongwith his permanent account number and the fact that he was assessed to tax. It is further seen that the dates of credit of various amounts in the capital account of the appellant tally exactly with dates of payments as per the ledger account of the appellant ....
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....me to the conclusion that the creditor was not having source. In the circumstances, I find that the addition is not justified and the same is deleted. The representative submitted a copy of income tax return of M/s.Kannan Enterprises, Kollam as per which the amount of advance given to the appellant is getting duly reflected. This return of income is taken as supporting evidence and on the basis of the same it is found that the creditor had availed bank loan which was utilised for the purpose of giving advance to the appellant. Even without the above supporting evidence, I find that there was no justification for adding credit as the creditor had confirmed the same and also furnished his permanent account number on which the Assessi....
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....deleting the addition made by the AO under Section 68 of the Act. We do not find any merit in these appeals filed by the Revenue." 8. The learned counsel for the Revenue/appellant submitted that the Ledger Accounts of the Assessees concerned were not produced before the Assessing Authority nor the said creditor viz., Proprietor of M/s.Kannan Enterprises, Kollam was produced before the Assessing Authority and only a letter dated 8.12.2016, in pursuance of the notice issued to the Assessees, was produced before the Assessing Authority. He submitted that if any additional evidence was produced before the learned Appellate Authority, Rule 46A of the Income Tax Rules 1962 requires the matter to be remanded back to the Assessing Authority to a....