GLX CHEMICALS PVT. LTD,NEW DELHI vs. CIT (A)-22 NEW DELHI, NEW DELHI

This present appeal has been preferred by the assessee against the

order dated 30.01.2019 of the Ld. Commissioner of Income Tax (Appeals) -

22, New Delhi [hereinafter referred to as ‘CIT(A)’] pertaining to AY 2015-16.

notices issued. A perusal of the case file shows that the case has fixed

several times and notices have been issued to the assessee but none

appeared on behalf of the assessee. It shows that the assessee is no more

interested in prosecuting it’s appeal. In view of the above, I proceeded to

decide the appeal on merit after hearing the Ld. DR and after going through

the record.

ITA No. 3209/Del/2019

1) Because the Ld. CIT(A) has erred both in law and on facts in confirming the addition of Rs. 22,92,792/-out of addition of Rs.36,75,516/- made by the Assessing Officer by treating the sundry creditor as unexplained Cash Credit u/s 68. 2) Because the Ld. CIT(A) should have deleted the addition of Rs. 22,92,792,/- made by the Assessing Officer treated the sundry creditor as the unexplained cash credit even most of creditor are old outstanding and were genuine and to be paid/settled in future. All the creditors are genuine and business transactions have been entered with them. The Ld. CIT(A) has erred in confirming the same. 3) Because the Ld. C1T(A) has mis-interpreted the contention of the assessee. The assessee contended that the business of the assessee is “in the process of closing down”. The Ld. CIT(A) interpreted the contention as “the business has been closed down”. 4) Because the Ld. C1T(A) erred in defying the contention of the assessee that the asseessee company is in the process of recovering dues from the sundry debtors and clearing the dues of sundry creditors and if not able to clear sundry creditors dues, all such sundry creditors shall be written off during current financial year i.e. 2018-19. 4. The sole issue involved in this appeal is relating to the additions

made by the Assessing Officer ( in short ‘the AO’) into the income of the

assessee on account of non-paid sundry creditors. The AO noticed that six

sundry creditors amounting to Rs.36,75,516/- were outstanding. The AO

made enquiries by issuing notices u/s 133(6) of the Act. However, no

proper reply was received from the concerned parties. The AO further noted

that in case of M/s Mahadev Enterprises, the notice issued was returned

back unserved with postal remark that ‘no such address’. Further, M/s

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ITA No. 3209/Del/2019

Person Chem Resources, in its reply to the AO denied having any

transaction with the assessee. The AO, therefore, concluded that the

assessee did not have any liability of payment towards the aforesaid

creditors and added the amount of Rs.36,75,516/- into the income of the

assessee.

aforesaid creditors were in fact sundry creditors who had supplied the

goods to the assessee in preceding year. The assessee also furnished

evidence of payment of Rs.13,82,728/- to one of the party M/s Chaitanya

Chemicals Corp.

The Ld. CIT(A) considering the aforesaid facts, deleted the addition in

respect of M/s Chaitanya Chemicals Corp. However, he observed that the

assessee did not make payment to any other party. Further, the Ld. CIT(A)

noted that even the assessee has already returned back most of the

creditors except the aforesaid six creditors out of which the payment was

made to one of the party. He observed that the business of the assessee

had already been closed down. The Ld. CIT(A), therefore, agreed with the

conclusion made by the AO that the credit balance in respect of remaining

five creditors was neither paid nor outstanding, and hence the same was

required to be added to the income of the assessee.

assessee but neither any explanation has been furnished nor any details

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ITA No. 3209/Del/2019

have given by the assessee to show that any payment has been made to the aforesaid creditors. Considering the overall facts and circumstances of the case, I do not find any reason to interfere with the order of the Ld. CIT(A) and the same is upheld.

Order pronounced in the open Court on 22.06.2022.

- Sd/- (SANJAY GARG) JUDICIAL MEMBER Delhi; Dated: 22/06/2022. f{x~{tÜ f{x~{tÜ f{x~{tÜ f{x~{tÜ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI

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