MANJU SHARMA,GIRIDIH vs. INCOME TAX OFFICER, GIRIDIH

Shri Rochit Agarwal, ld AR appeared for the assessee and Shri H.Robindro Singh, ld CIT DR appeared for the revenue.

In revenue’s appeal, it was submitted by ld CIT DR that in the course of assessment, the Assessing Officer had asked the assessee to prove the sundry creditors to an extent of Rs.5,87,13,525/- representing nine creditors. The assessee had not provided any details before the Assessing Officer. On appeal before the ld CIT(A), the assessee had provided certain details, which were sent by the ld CIT(A) to the Assessing Officer for a remand report and the ld CIT(A) has extracted the remand report in pages 3 & 4 of the order. The Remand Report specifically mentions that the details were in the form of ledger entries, which are basically the documents of the assessee. No evidences in respect of the creditors per se from the record of the creditors were produced before the ld CIT(A) or the Assessing Officer. The Assessing officer in his remand report has categorically mentioned that the information provided primarily comprises internal records, which do not independently establish the identity, creditworthiness or genuineness of the creditors. It was the submission that two transactions were not proved and consequently, ld CIT(A) has made addition of Rs.4,50,000/- in respect of Panesar Steel & Power Limited and Rs.25,00,000/- in respect of SPS Steels Rolling Mills Ltd. P a g e 2 | 4

In reply, ld AR submitted that all the details have been produced. It was the submission that these are trade creditors. It was the submission that the ledgers of the creditors were produced and all the payments were made through banking channel. It was the submission that the identity, genuineness and creditworthiness of the creditors have been proved. It was the prayer that the addition as made by the AO and confirmed by ld CIT(A) be deleted and the order of the ld CIT(A) in deleting the addition may also be confirmed.

We have considered the rival submissions. A perusal of the order of the ld CIT(A) at pages 7,8 & 9 shows that the ld CIT(A) has pointed out certain defects in the evidences produced by the assessee. Some of the confirmations do not contain seal and signature of the creditors. The Assessing Officer has also categorically mentioned that the identity, creditworthiness and genuineness of the transaction have not been proved. The evidences which have been produced by the assessee before the ld CIT(A) are the books of account of the assessee. There is no evidence produced of the creditors which could substantiate their claim. This being so, we are of the view that the issue needs to be examined afresh by the P a g e 3 | 4

In the result, appeal of the revenue and the appeal of the assessee as well as cross objection are partly allowed for statistical purposes.