TaxTMI 
TaxTMI 
2025 (10) TMI 227
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....or. 3. The assessee is engaged in the business of wholesale trading of iron and steel under the proprietorship of Bansal Sales Corporation. During assessment proceedings, he observed that during the year, assessee has declared gross turnover of Rs. 36,59,71,751/- yielding GP of 0.67% and net profit of 0.26%. The AO on perusal of the Balance Sheet noticed that assessee has shown sundry creditors outstanding at Rs. 8,82,71,609/-. In this regard, the assessee was asked to furnish details/confirmation in respect of the above sundry creditors for further verification. The assessee has furnished the details of sundry creditors. The notices were returned unserved by the postal authorities with the remark "not known and left". The same was confronted with the assessee. The assessee has submitted copies of ledger account showing the purchases made from these creditors. In order to verify the same, an Inspector was deputed to verify the correctness of the business transactions and obtained copy of ledger and ITR from the respective creditors. The Inspector could not trace the two creditors at the given address and the accountant of creditor, SS Traders could not provide the requisite info....
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....03,09,347/- which was added to total income of the appellant as not proved. In the remand report the AO stated that on re-examination as per order dated 23.01.2019, the re-sent notices etc. have either returned or the reply or information has not been sent, it is justified not to accept the evidence presented by the appellant. In the remand report the AO stated that Mr. Gopal Prasad, Inspector was deputed to make enquiries with regard to the above trade creditors. The Inspector found the office of Khem Chand & Associates at this firm letterhead address which belongs to Mehar Chand who was working at this address for the last 5 years and did not know the firm named JBS Trading Company. With regard to S.S. Trading Company, the AO in the remand report stated that Mr. Gopal Prasad Inspector did not find the firm at the given address. With regard to Shree Ram Traders, the AO stated in the remand report that the Inspector tried to find out this firm but due to incomplete address could not be traced. 7.1 It is seen from the above that the appellant could not prove the genuineness of trade creditors. The Inspector made enquiries and found the creditors not genuine. It is also seen....
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.... Ld. CIT(A) does not arise, and the addition made on this basis is incorrect and liable to be deleted. PB 112 is the copy of written submission dated 28.08.2017 duly filed before the Ld. CIT(A) submitted that based on the correct calculation-after adjusting the advances given to suppliers-the amount of addition, if any, should be restricted to Rs. 23,09,610/- instead of Rs. 1,03,09,347/-. 2. Ld. CIT(A) mentioned in para 7 at page 17 of the impugned order that notices either returned or the reply or information has not been received so it is justified not to accept the evidence presented by the appellant. In reply it is submitted that the appellant had no control over third parties but had made all possible efforts to ensure compliance. Upon learning that certain notices were retuned or went unanswered, the appellant proactively approached the concerned creditors, who subsequently submitted confirmations and ledger accounts directly to the Assessing Officer. Additionally, the appellant submitted VAT registration details and sales tax records substantiating the transactions. Therefore, the rejection of evidence solely on the ground of non-receipt of replies....
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....ld. CIT (A) from pages 14 to 18 of the appellate order and he relied on the findings of the ld. CIT (A). 8. Considered the rival submissions and material placed on record. We observe that the AO while examining the records noticed that assessee has declared huge sales, however declared less GP and NP. During assessment proceedings, he noticed that assessee has shown huge sundry creditors in their Balance Sheet. He asked the assessee to submit the details of purchases and confirmations. The assessee has submitted all the information including confirmations from the parties. Since the main three parties from whom assessee has purchased were not found in the addresses given by the assessee, the AO on deputation of Inspector from his office could not trace and extract the information from these parties. Accordingly, he came to the conclusion that the purchases are bogus and accordingly, he proceeded to make addition of the purchases considering only the difference of closing balance outstanding as on 31.03.2013 and 31.03.2012. Before us, ld. AR brought to our notice detailed ledgers of the three parties, namely, JBG Trading Company, SS Trading and Shree Ram Traders. From the ledgers....