2025 (7) TMI 658

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....T, CC-17, New Delhi, under Section 144 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for the Assessment Years 20-08-09 & 2008. ITA No.3763/Del/2024 (Department's Appeal) "1. Whether the Ld. CIT(A)-26 has erred in the eyes of law in deleting the additions on account of lower GP offered by the assessee and has not provided the manufacturing account despite the ample opportunity being given by the AO. 2. i. Whether the Ld. CIT(A)-26 has erred in the eyes of law in deleting the additions on account the bogus creditors entries on the basis that the same has been squared up by the assessee in the subsequent years without considering the facts that this is an organized way of the assessee to avoid penaltie....

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....has granted relief by holding as follows: "5.1.6 In view of the above facts and circumstances, I am of the considerate view that the assessing officer did not provide GP details and the nature of the activity of the person, who was relied upon by the AO to the appellant for applying the GP at the rate of 21% in the hands of the appellant. Further, it is submitted by the appellant that, there was no adjustment made by the AO in the earlier years on that account. In the absence of finding out any defects or incorrectness of the said account, the estimation of GP by the assessing officer by applying the GP rate of 21% of the appellant's turnover is not tenable and accordingly the said addition made to the tune of Rs. 14,28,495/- i....

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.... 133(6) of the Income Tax Act. 1. B.M. Traders 2. Rahoboth Industries 5.27 In view of the above, it has been observed that the appellant has not explained/ completely satisfied the genuineness the following creditors by way of submitting necessary documentary evidences, confirmations and subsequent transactions/repayments made. 1. Pylon Traders. 697848/- 2. K.S. Consumer Product. 75000/- 3. Sahar International. 1227293/- 4. Karuna Industries. 368878/- Therefore, I am of the considerate view that, the disallowance made by the AO u/s 68 of the Income Tax Act on the above stated creditors is sustainable. Accordingly, the AO is directed to delete the additions made account ....

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....The Ld. CIT(A) has erred on facts as well as in law in sustaining the addition in respect of M/s Pylon Traders K.S. Consumers Products and Karuna Industries Inspite of the fact that they have been paid through banking channel and the transaction are through proper documents. 2. The parties shown in paras 5.2.4 to 5.2.7 are irrelevant and seems to have wrongly been typed; need to be ignored." 10. The assessee is challenging the portion of disallowance sustained by the Ld. CIT(A) on account of Section 41(1). For this purpose he has submitted the paper book containing the following documents: "1. Written Submission dated 04.07.2019 filed before CIT (A)-28, New Delhi 2. Ledger A/c, Bank Statement, and confirmation ....