TaxTMI 
TaxTMI 
2024 (9) TMI 724
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....Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as CIT(A), NFAC) under section 250 of the Act to the extent prejudicial to the appellant is bad in law and liable to be quashed. 2. Addition in respect of sundry creditors 2.1. The learned AO and the CIT(A), NFAC have erred in making addition of Rs. 60,529, Rs. 90,79,528 and Rs. 29,60,099 in respect of the amounts standing in the names of sundry creditors only for the reason that the creditors have not confirmed the balances standing in the name of the appellant independently. 2.2. The learned AO and CIT(A), NFAC erred in not appreciating and considering the balance confirmations confirmed by the sundry creditors which was submitted during the assess....
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....ooks of assessee and the assessee was asked to produce them for examination. The assessee was unable to produce the sundry creditors and failed to establish that the sundry creditors are genuine. Accordingly, the entire closing balance of Rs. 90,79,428 of 24 creditors was added to total income of assessee. 4. The AO further noted that 3 notices sent to the creditors returned unserved. In this regard also the assessee did not produce the creditors before the AO. Accordingly Rs. 29,60,999 was also added back to the total income of assessee. 5. Further the AO sent letters to debtors, out of which in the case of 6 debtors letters returned unserved with the postal remarks "no such address, insufficient address, left without instruction, deceas....
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....es and closing stock as declared by the assessee therefore, the AO(Assessing Officer) is not justified in disallowing the sundry creditors. He further submitted that the case of the assessee for AYs 2011-12 & 2013-14 were subject to scrutiny proceedings and order was passed u/s. 143(3) on 26.3.2014 and 26.02.2016 respectively and there is no addition made towards creditors. The closing balance appearing in the books of assessee of creditors were shifted to the next assessment year as opening balance and the AO has not disputed it while completing the assessment proceedings for AY 2013-14 on 26.2.2016, however the assessment order for the impugned assessment year is passed on 27.3.2015. He also submitted that the confirmation of creditors we....
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....4 (Delhi) 8. The ld. DR relied on the order of lower authorities and submitted that regarding difference in accounts of Rs. 60,529, the assessee did not file any evidence as placed in Page 106 of PB. It was the primary duty of the assessee to substantiate all the entries made in the books of account with cogent materials. However the assessee has failed to do so. Further in respect of non-compliance of notices and notices unserved to the creditors, he categorically relied on para 6.4.2 of the CIT(Appeals) order and subitted that assessee did not file confirmation letters of the parties either during assessment proceedings as well as appellate proceedings. During the remand proceedings the assessee was unable to prove the genuineness of cre....
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....r in respect of those creditors who have not responded to the notices of AO as well as in case of some creditors some notices were not served or returned unserved, the assessee was also asked to produce confirmations from creditors, but the assessee had provided only name and address as per assessment order. But on going through the pages 115 to 145 of PB (sl.no.22) filed by the assessee, the assessee has mentioned that letter dated 2.2.2015 filed with the AO on 6.2.2015 along with confirmation of sundry creditors balances signed by the sundry creditors and it was filed before the AO. The letter is dated 9.2.2015 and it was received by office of ITO, Ward 1, Haveri. However jurisdiction of the AO who has passed the order is ITO, Ward 2, Hav....