TaxTMI 
TaxTMI 
2022 (3) TMI 718
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....quiry conducted by Ld. Assessing Officer, the assessment order dated 07.12.2016 was passed u/ 143(3) of the Act and sum of Rs. 2,30,56,317/- was added on allegations of bogus liability disallowed u/s 68 of the Act and an addition of Rs. 1,14,754/- was made, as allegedly assessee failed to reconcile the account of one M/s. Orient Links Pvt. Ltd. 3. The order of Ld. AO was challenged in appeal by the assessee primarily on the ground that Ld. AO had erred in making the addition of 2,30,56,317/- without making any inquiry and without exhausting all the available alternatives as per the provisions of the Act and also by declining to take documents on record and wrongfully rejecting the books of accounts. 4. The assessee had filed an application under Rule 46A of the Income Tax Rules, 1962 for admitting additional evidences and the same was allowed by the Ld. First Appellate Authority. 5. Based upon the additional evidences and rejoinder submitted by the assessee to the remand report, the Ld. First appellate Authority reached the conclusion that addition of creditors made u/s 68 of the Act is not sustainable and also as the Ld. AO had never asked for books of accounts so how cou....
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.... 8. The arguments of both the sides were heard and record was thoroughly perused. 8.1 As with regard to the grounds no 1 and 3, the Ld. Counsel for the assessee took the Bench through the paper book to contend that the Ld. First Appellate Authority had duly considered the circumstances and the affidavit of husband of assessee which established the Ld. Assessing Officer had wrongly mentioned in the order that none had attended on behalf of the assessee and no evidence was produced while in fact the Ld. AO on the pretext that the ld. AO was busy in some other proceedings on the date of hearing had not taken on record the reply. It was submitted that when application for additional evidence was moved before the ld. First Appellate Authority, a remand report was called from the ld. AO, who merely replicated assessment order and did not comment anything on the merits of the additional evidence and thereafter CIT(A), giving opportunity to AO had taken the evidence on record and which became foundation to his findings. He thus submitted Ld CIT(A) has committed no illegality in admission of additional evidence. 8.2 Ld. Counsel of the assessee has relied the order of ITAT, 'F' Bench, ....
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....epted that the Ld. First Appellate Authority has failed to make discussion and finding on it while completely allowing the appeal. He fairly admitted that the matter may be remitted back to the Ld FAA with necessary directions. 11. Now, the point for determination being first whether the ld. First Appellate Authority has relied additional evidence of assessee without giving sufficient opportunity of its rebuttal to the Ld. Assessing Officer and secondly the additions made u/s 68 of the Act by the Ld AO were illegally deleted by CIT(A) on the basis of inadmissible evidence of assessee. 12. In regard to the first point for determination para no. 5 of order of Ld FAA, is relevant and the same is reproduced below for convenience. "5. The appellant along with the application for additional evidence also submitted a paper book. It is learnt from the notesheet my Ld. predecessor has admitted additional evidence vide order sheet dated 17.08.2017. The letter requesting admission of additional evidence was sent to the AO ward 47(5) for comment. The AO in his remand report dt. 22.08.2017 has replicated the assessment order and pleaded not to admit the additional evidence. The A....
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....e copies of ledger accounts of all 15 creditors for FY 2015-16 with corresponding bank entries has been placed at page no. 127-141. 15. It can be observed particularly at page no. 111 of the paper book that the account of Adinath Enterprises shows an opening balance of 11,19,928/- with 15 purchases entries and payment of 17 lakhs between 01.04.2014 to 31.03.2015. 16. The Ld. First Appellate Authority had noticed in para no. 7.1 of its order that the two parties, Sai Nath Trader & Adinath Enterprises had transaction during the year. As observed earlier in case of Adinath Enterprises even purchases were made and in case of Sai Nath Traders to payment of Rs. 4 lakhs and 4,50,000/- were made. 17. Thus, the Ld. First Appellate Authority has validly observed on the basis of appreciation of additional evidence, in the form of aforesaid documents, that the creditors were not bogus liabilities. 18. Even otherwise merely on the basis of opening balances without making a substantive inquiry, the sundry creditors could not have been rejected. The order of assessment indicates that based upon the remarks on the envelopes issued to the creditors of the assessee, the Ld. Assessing off....