TaxTMI 
TaxTMI 
2019 (11) TMI 631
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.... 4. Facts of the case, in brief, are that the assessee is an individual and is engaged in the trading of buffalo omasum and meat. He filed his return of income on 30th September, 2008 declaring the total income at Rs. 2,53,216/-. During the course of assessment proceedings, the Assessing Officer noted that there are six creditors, namely, Shri Atiq Qureshi, Farique Qureshi, Gayasuddin Qureshi, Husnain and Javed and the total amount payable to them was Rs. 11,69,600/-. He issued notice u/s 133(6) to these creditors. Out of five creditors three unserved envelopes in the case of Shri Shri Husnain, Atiq Qureshi, Shri Farique were received back with the Postal remarks: "incomplete address." So far as the other two creditors are concerned, neith....
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....ons made by the appellant have no force and are accordingly rejected. Once the envelopes containing notices u/s 133(6) of the Act were received back unserved/uncomplied the onus shifted on to the appellant to establish that the creditors were genuine. However, the appellant by not producing such creditors has not discharged its burden u/s 68 of the Act. Thus in the light of the above facts it is held that the AO was justified in making addition of Rs. 11,69,600/-. The same is here confirmed. Ground of appeal No.l is dismissed." 5. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal. 6. The ld. counsel for the assessee strongly challenged the order of the CIT(A) sustaining the addition made by the Assessi....
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....an amount of Rs. 1 lakh and above as shown by the assessee in her books of account on the ground that they were neither income tax assessees nor having PANs and the assessee failed to produce books of account entries regarding sales and purchase, etc. Accordingly, the sundry creditors were disallowed u/s 68 of the Act. The Tribunal found that even if it is accepted that books were rejected, however, the Assessing Officer had not disallowed the purchases from those creditors nor the trading results have been disturbed and accordingly the Tribunal deleted the addition made by the Assessing Officer. In appeal filed by the Revenue, the Hon'ble High Court held that when disallowance for corresponding purchases were not made, no addition coul....
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....lied on various other decisions as placed in the paper book. The ld. counsel accordingly submitted that the addition made by the Assessing Officer and sustained by the CIT(A) is not justified. 7. The ld. DR, on the other hand, heavily relied on the order of the Assessing Officer and CIT(A). In his alternate submission, he submitted that he has no objection if the matter is restored to the file of the Assessing Officer with a direction to the assessee to produce the creditors before the Assessing Officer for his examination. 8. I have considered the rival arguments made by both the sides and perused the orders of the authorities below. I have gone through the paper book and the various case decisions cited before me. I find the Assessing O....
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....g Officer has not rejected the book results and thereby has accepted the purchases made from the said parties and the sales have also been accepted. Under these circumstances, it has to be seen as to whether the addition is called for merely because some of the letters issued u/s 133(6) were returned back unserved or in some other cases there was no compliance from the said creditors. The coordinate Bench of the Tribunal in the case of Sudha Loyalka (supra) has held that addition cannot be made u/s 69C in respect of amount payable to creditors towards purchases when such purchases were duly recorded in books of account and sales made against those purchases was not disputed. The Lucknow Bench of the Tribunal in the case of Zazsons Exports L....
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....owance of Rs. 80,000/- on ad hoc basis which has been upheld by the CIT(A). 11. It is the submission of the ld. counsel for the assessee that when the Assessing Officer had not rejected the books of account and no specific amount has been doubted and the accounts are audited and the auditors have also not pointed out any defects, the addition made by the Assessing Officer and sustained by the CIT(A) is not justified. I find some merit in the above arguments of the ld. counsel. Admittedly, the accounts of the assessee are audited u/s 44AB by the auditors and they have not given any adverse remarks. The Assessing Officer has not pointed out any specific defect and has merely made the disallowance on ad hoc basis on the ground that the asses....