TaxTMI 
TaxTMI 
2024 (10) TMI 651
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....n record. The assessee is engaged in the business of trading of Basmati rice. The return of income for assessment year 2015-16 was filed by the assessee declaring total income of Rs.6,80,240/- on 28.09.2015. The return was selected for scrutiny and notice u/s 143(2) of the Act stood issued and served on the assessee. The ld AO observed that the assessee had reflected sundry creditors of Rs.4,97,57,755.72 in the balance sheet as under:- Sr. No. Name of the Sundry Creditor Amount outstanding 1 Dunar Foods Ltd. 1,06,20,147.96 2 Heritage Infracon Pvt. Ltd. 1,10,44,941.25 3 Rajan Goyal & Brothers 98,64,797.95 4 Suresh Kumar & Sons 1,80,12,259.56 5. Personality Care Apparels Pvt. Ltd 2,15,609 5. The assessee submitted the confirmation in respect of aforesaid parties vide letter dated 25.07.2017. Further the ld AO issued notice u/s 133(6) of the Act to the sundry creditors reflected in Sl Nos. 1 to 4 (supra). More particularly, the ld AO proceeded to examine the veracity of the sundry creditors listed in Sl Nos. 2 to 4 (supra) in detail. No response was received from the parties for notice u/s 133(6) of the Act. Summons u/s 131 of the Act was issued to all the parties a....
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....nce of assessee's counsel. The assessee vide letter dated 12.10.2017 requested for copy of statements recorded from three persons which were duly provided to the assessee. But no details were either furnished by those three persons as promised or by the assessee before the ld AO. However, the AO conducted further enquiries which revealed that Shri Anil Saxena, who was produced by the assessee as an accountant of M/s. Heritage Infracon has a bank account with State Bank of India, Model Town, Karnal, which revealed his address to be M/s. Best Food Ltd, PO Box No. 5, Indri, Karnal. The Branch Manager of State Bank of India, Model Town, Karnal had confirmed that salary in the bank account of Shri Anil Saxena was credited from M/s. Best Foods Limited. The ld AO also examined income tax returns of Shri Anil Kumar Saxena for Assessment year 2015-16, wherein he had reported salary income from his employer M/s. Best Food Limited. Accordingly, the ld AO concluded that Shri Anil Saxena is an employee of M/s. Best Food Limited. Similar enquiries made by the ld AO revealed that Shri Sunil Kumar and Vikas Mohan also were employees of M/s. Best Foods Ltd and were in receipt of salary from M/s. Be....
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....iability in terms of Section 41(1) of the Act and addition of Rs.3,89,21,998/- was made by the ld AO. This action of the ld AO was upheld by the ld CIT(A). 8. The ld AR before us stated that in respect of Heritage Infracon and Rajan Goyal and Brothers, purchases made from them were in Assessment year 2013-14 and in respect of sundry creditor M/s Suresh Kumar & Sons, purchases were made from them for Assessment years 2013-14 and 2014- 15. He submitted that in the years of making purchases by the assessee, the same were accepted as genuine by the ld AO. He also placed on record the scrutiny assessment order of the assessee for Assessment year 2013- 14 u/s 143(3) of the Act dated 31.03.2015. The assessee from his side in order to prove the veracity of all these creditors had submitted confirmation from the creditors, PAN of the creditors, ITR acknowledgement of the creditors, audited balance sheets as on 31.03.2015 of the creditors, assessment orders for Assessment years 2013- 14 and 2014-15, as the case may be, of the creditors. The ld AR also submitted that these sundry creditors have running accounts with the assessee and they are paid in Assessment Year 2016-17. The ld AR also re....
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....and no adverse inference was drawn thereon. Similar is the case for Assessment year 2014-15 u/s 143(3) of the Act dated 14.06.2016, which are enclosed in pages 168 to 169 of the paper Book. With regard to M/s. Rajan Goyal & Brothers, though no scrutiny assessment orders framed on them were placed on record by the assessee, sale invoices raised by the said party on the assessee were furnished together with the audited financial statements and income tax return acknowledgement and tax audit report. On perusal of these documents, it is found that the said concern is also engaged in the business of trading of Basmati rice. Further notice u/s 133(6) of the Act was issued by the ld AO to the said party and the same was duly responded by the said party by furnishing the requisite details directly before the ld AO. Further, an order u/s 263 of the Act was passed in the hands of Rajan Goyal for Assessment year 2012-13, wherein the ld PCIT, Karnal sought to examine the veracity of the secured loan borrowed by M/s. Rajan Goyal and Brothers from Axis Bank to the tune of Rs.5 crores. This aspect itself goes to prove that the said party cannot be ingenuine as it had the benefit of receipt of sec....
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....n ITA No. 806 of 2018 dated 27.08.2018 is very well founded and directly applicable to the facts of the assessee's case. Hence, Ground Nos. 3 to 5 of the assessee are hereby allowed. 11. Ground No. 6 raised by the assessee is challenging the addition made on account of unsecured loan of Rs.15 lakhs as unexplained cash credit u/s 68 of the Act. 12. We have heard the rival submissions and perused the material available on record. The ld AO observed that assessee had shown unsecured loan of Rs. 15 lakhs from Silver Link Commodities Pvt Ltd. The assessee was asked to prove the 3 ingredients of Section 68 of the Act qua this loan creditor. The assessee submitted confirmation of the lender, PAN of the lender, copy of ledger account of the lender proving that the monies were received through regular banking channels. The ld AO issued summons u/s 131 of the act on 18.12.2017 on the said lender, which was duly served but it did not respond to the said summons. Accordingly, the ld AO concluded that the said loan amount as unconfirmed and unverified and proceeded to treat the loan of Rs.15 lakhs as unexplained cash credit u/s 68 of the Act. This action of the ld AO was upheld by the ld CIT(....