TaxTMI 
TaxTMI 
2020 (12) TMI 498
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....ng total income of Rs. 8,64,800/-. The case was selected for scrutiny through CASS for limited scrutiny with the points of identification being large sundry creditors in comparison to low net profit. The Assessing Officer while examining the case of all the sundry creditors whose balance were outstanding as of the end of the previous year, found following three parties did not respond to his Section 133(6) notice, therefore he drew adverse inference against the assessee against these three creditors. Sl. No. Creditors Amount added (in Rs.) 1. M/s Lhaki Steels and Rolling Pvt. Ltd., 1st Floor,RICBL Complex, Phuentsholing, Bhutan, P. B. No. 252 7,18,920/- 2. Bhutan Rolling Mills, Flat No. 8, Samdrupling House, Pelkhil Lam, Phuensh....
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....f non-response from the three sundry creditors, the assessee failed to give any satisfactory replies to prove the genuineness of the sundry creditors. Therefore, according to Ld. CIT(A), the Assessing Officer rightly drew adverse inference against the assessee, therefore, he confirmed the addition. 5. Aggrieved the assessee is before me. 6. I have heard both the parties and perused the records. Before me, the ld. A.R Shri Akkal Dudhwewala submitted that these are routine trade credits while doing business and since assessee is a trader and has purchased tradable material/goods i.e. equipments from the three sundry creditors to whom the assessee was indebted to pay for this trading liability was duly reflected which according to him, could....
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.....R. submitted that out of total outstanding sundry creditors, the AO issued notices to all the eleven (11) sundry creditors, and pursuant to which eight (8) responded to the AO's notice u/s. 133(6), so he accepted their genuineness. However, since three sundry creditors could not respond to the notice, the AO drew adverse inference against them. Thereafter the ld. A.R drew our attention to the details in respect of each sundry creditors namely (i) M/s. Lhaki Steels and Rolling Pvt. Ltd. ii) Bhutan Rolling Mills and iii) Bajrang Traders and pointed out that among these sundry creditors first two sundry creditors who supplied goods to the assessee are foreign entities and non-residents of India which fact is discernible from their postal ....
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....ee had squared up the balance payment to this sundry creditor in the subsequent assessment year i.e. AY 2015-16 on 09.09.2014, 23.02.2015, 10.03.2015, 14.03.2015, 14.03.2015 and thus the total amount of Rs. 30,47,374/- was credited to this sundry creditor. The Ld. A.R drew my attention to the confirmation from the party placed at page 19 of paper book, which is as under: 9. Thereafter the Ld. A.R drew our attention to the sundry debtor shown at Sl. No. 3. He drew my attention to page 21 and 22 of the PB from where I note that the assessee has squared up the sum of Rs. 7,68,215/- on 31.03.2014 (i.e. in AY 2016-17). According to Ld. A.R this sundry creditor was a proprietary concern from inception and it had to be closed down due to financia....
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....e assessee has given confirmation of receiving the amount, the AO rejected the same on the flimsy reason that assessee was furnishing this document before him and not the sundry creditor proprietor Shri Sougata Bhowal of M/s. Bajrang Traders, which action of AO cannot be countenanced, because, when the assessee produced the confirmation from the said party, if the AO doubts the veracity of the document then he was duty bound to cross-verify the veracity of the same. It is noted that in respect of M/s. Bajrang Traders the assessee has placed on record the copy of the invoice raised by the said supplier which inter alia comprised of the details of purchases, name, address, PAN, VAT details of the supplier. The quantity and value of purchases ....