TaxTMI 
TaxTMI 
2023 (12) TMI 29
X X X X Extracts X X X X
X X X X Extracts X X X X
....n account of unexplained outstanding liabilities of Rs. 3,47,40,260/- whereas during the course of assessment proceedings as well as remand proceedings, the assessee failed to prove the genuineness of purchases with evidences. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A), Surat ought to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the ld. CIT(A)-1, Surat may be set aside and that of the Assessing officer's order may be restored. 4. On the facts and circumstances of the case and in law, the appellant craves its right to add, alter, amend, deleted, any of the ground or grounds of appeal." 2. Brief facts of the case are that the assessee is an LLP, engaged in trading of diamond, filed its return of income for A.Y. 2015-16 declaring income of Rs. 31,900/-. The case was selected for scrutiny. During the assessment, the Assessing Officer noted that the assessee has shown sundry creditors on account of purchase of goods and also claimed various expenses. The Assessing Officer further recorded that neither any one attended on behalf of assessee nor filed any written submission, therefore, a final....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... liability. The Assessing Officer has not rejected sales and outstanding debtor of the firm, why there is no opening or closing stock in the audit report. If entire stock bought has been sold and sales consideration is not realized then it implied that payment of outstanding creditors will yet to be completed. The assessee furnished copy of trading and profit and loss account, balance sheet, purchase register, sales register, stock register, bank statement, details of sundry creditors which includes Takshila Exim Pvt. Ltd. with copy of confirmation and ITR. Copy of sundry debtor, Bahubali Diamonds Pvt. Ltd., copy of confirmation and ITR. The latest address of creditor and debtors were also furnished. On the basis of such submission and the evidence, the assessee made prayer for deleting the entire addition. 4. On the submission and evidences furnished by the assessee, were considered as additional evidence and forwarded to Assessing officer under Rule 46A of the Income Tax Rules, 1962 (in short, the Rules). The Assessing Officer furnished his remand report dated 29/08/2019. The remand report contains of remand report, as recorded in para 8.1 of order of ld. CIT(A). The Assessing....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e in respect of current liability stand clarified. The assessee also raised a plea that the Assessing Officer doubted the creditors against the purchases and made addition of the entire amount outstanding against the purchases without pointing out any mistake in the books maintained by assessee in regular course of business and not doubted the method of accounting regularly employed. Trade result is not doubted. Payment made in the subsequent year would outstanding trade payable had not been refuted by the Assessing officer. Once sales and purchase and trade result is accepted, the purchases made on credit being represented as sundry creditor in the books of assessee is not to be doubted. The assessee also relied on various case laws. On the submission of assessee that the Assessing Officer has not made any adverse report/not given his finding, the Assessing Officer was directed to furnish his report. In response to such direction dated 24/06/2019, the Assessing Officer furnished his second remand report vide report dated 29/08/2019. In the second remand report, the Assessing Officer submitted that Bahubali Diamond Pvt. Ltd. and Takshila Exim Pvt. Ltd. submitted their bank statemen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....T-DR for the revenue submits that no details were furnished about the sundry creditors by the assessee despite repeated notices by the Assessing Officer. The assessee for the first time filed before the ld. CIT(A), filed such details by taking plea that they started business only in the last days of January, 2015 or that credit period varies from 90 days to 180 days. The additional evidence of assessee was admitted without considering the scope of Rule 46A. The Assessing Officer opposed the admission of additional evidence during the appellate proceedings. The onus was on the assessee to prove the genuineness of credit entry in their books of account and the assessee failed to discharge their onus. To support such view, the ld. CIT-DR for the revenue relied upon the case laws which was relied by Assessing Officer in CIT Vs Ranjit Kumar Choudhary (2007) 288 ITR 179 and N.B. Surti Family Trust Vs CIT (2007) 288 ITR 523 wherein it was held that where the evidence is new and assessee could not give any explanation why such evidence was not produced at lower stage, the Tribunal was justified in not entertaining new evidence. The ld. CIT-DR for the revenue submits that books of account w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 07/08/2015 and further sales to assessee in F.Y. 2015-16. 9. We have considered the rival submissions of both the parties and have gone through the orders of the lower authorities carefully. We find that the Assessing Officer made addition by disallowing sundry creditor of Rs. 3.47 crores by taking a view that despite giving various show cause notices, no detail is furnished. We find that the ld. CIT(A) granted relief to the assessee on considering the additional evidence. The ld. CIT(A) sought remand report from the Assessing Officer. The Assessing Officer in his remand report has not disputed about the transaction rather accepted that seller and purchaser party both responded. Moreover, the Assessing Officer in second remand report clearly submitted that "they have submitted bank statement (shown some payment in subsequent year)". We also find that neither the sale of assessee was disputed nor the purchase transaction was disputed, the Assessing Officer merely disputed the outstanding balance of sundry creditors. The Assessing Officer has not brought any adverse material to show that the assessee was having wrong credit when the assessee categorically contended that they sta....