TaxTMI 
TaxTMI 
2019 (6) TMI 1226
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.... Year 2010-2011. 2. The Revenue has proposed the following two substantial questions of law in its Memorandum of Appeal : "(A) Whether on the facts and circumstances of the case and in law, the Hon'ble IAT has erred in deleting the addition made on account of unverifiable purchase ? (B) Whether on the facts and circumstances of the case and law, the Hon'ble ITAT has erred in deleting the addition made on account of unverified sundry creditors ?" 3. The Assessment Year is 2010-2011. In this case, the income was assessed to the tune of Rs. 2,35,74,160=00 under Section 143(3) of the Act vide order dated 8th March 2013 by making the addition of Rs. 1,05,08,800=00 on account of the URD purchases unverified, Rs. 1,....
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....visions of section 68 of the IT Act. [Addition : Rs. 1,17,31,334/-]" 8. The Commissioner (Appeals) held as under : "The first ground of appeal is in regard to the addition of Rs. 1,17,31,334/- on account of non-filing of confirmations from the sundry creditors. During the assessment proceedings the appellant was asked to produce the confirmations from the sundry creditors. No confirmations were filed by the appellant which made the assessing officer handicapped as he was not able to call information u/s. 133(6) of the Act from these sundry creditors for want of their addresses. The only reply given by the appellant was that the balances outstanding were paid in the next financial year. Some of the vouchers were produced for veri....
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....fficer has called for during the assessment proceedings on a number of times. Keeping in view these facts, I feel inclined not to accept the submission of the AR of the appellant and uphold the addition of Rs. 1,17,31,334/- made on account of unexplained sundry creditors being treated as unexplained cash credits after rejection of books of accounts. Hence, the ground of the appeal of the appellant is dismissed." 9. The Tribunal, ultimately, while allowing the appeal filed by the assessee, held as under : "We cannot ignore that the ld. CIT(A) has made addition of NP @ 2% of turnover thereafter, no further addition on account of trade creditors/sundry creditors can be made in the hands of the assessee specially when the assessee h....
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....ter like this. Apart from the identity, the satisfaction has to be with reference to a bundle of facts including the capacity to pay for proving the genuineness of the transaction. The income has to be explained in terms of Section 68 of the Act. It was submitted that in the case on hand the Assessing Officer and the Commissioner rightly ruled that the assessee was unable to explain the genuineness of the transaction. In such circumstances, the Tribunal ought not to have disturbed the findings by drawing presumptions. 11. In such circumstances referred to above, the learned counsel submits that a substantial question of law is involved in the present Appeal as regards the account of unverified sundry creditors as well as on the issue of ....
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....on the same books of accounts. The ratio of the decision of this Court is that the Assessing Officer once having rejected the books of accounts could not have made further additions by relying upon the same books of accounts and the Assessing Officer should calculate the estimated reasonable profit of the assessee considering the history and nature of the business. 14. Having heard the learned counsel appearing for the parties and having gone through the materials on record, we are of the view that none of the two questions formulated in the memorandum of the Tax Appeal could be termed as the substantial questions of law. At best, they could be termed as the mixed questions of law and fact. 15. With regard to the first question, i.e. ....