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Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal filed by revenue is directed against the order of CIT(A) dated 16.4.2019. The revenue raised following grounds of appeal:-
“The order of the CIT (Appeals) is opposed to law and the facts and circumstances of the case.
Shri Ramapp Venkategowda, Bangalore
Page 2 of 6 2. On the facts and circumstances of the case, whether the Ld CIT(A) is justified in treating the invoices as supporting evidence for sundry creditors when some of those invoices have words like "cash paid" or "cheque received" written on them which clearly shows that the those dues are no longer outstanding?
On the facts and circumstances of the case, whether the Ld.CIT(A) is justified in deleting the addition on grounds of uncorroborated claim of sundry creditors when the credit worthiness and genuineness of Mr. Nanjegowda remains unestablished as only a signature against journal entry is furnished as confirmation and a number of other sundry creditors remain uncorroborated?
4. For these and such other grounds that may be urged at the time of ' hearing, it is humbly prayed that the order of the CIT(A), in so far as it relates to the above grounds may be reversed and that of the Assessing Officer be restored.
5. The appellant craves leave to add, to alter, to amend or delete any of the grounds that may be urged at the time of hearing of the appeal.”
The crux of the above grounds is with regard to deletion of addition of Rs.2,22,92,683/- made on account of sundry debtors.
3. Ld. CIT(A) in his order on appeal by the assessee has observed that that the addition of Rs. Rs 2,22,92,683/- made on account of sundry creditors and the assessee's claim that the amounts payable to the suppliers being Rs. 99,15,945/- and advances received from customers for supplies on a later date amount to Rs. 1,23,76,759/- has been verified from the copies of the confirmations submitted, the ledger extracts and the copies of the invoices submitted. Ld. CIT(A) observed that the AO has not brought anything on record to show
Shri Ramapp Venkategowda, Bangalore
Page 3 of 6 that the confirmations or invoices were not genuine or that these payments were not incurred by the assessee. The payments made and received are also through cheque. In view ci the same, tt10 amounts claimed under the head 'sundry creditors' are allowed to the assessee. Hence, the Ld. CIT(A) has held that the addition on this account of Rs. 2,22,92,683/- was deleted. Against this revenue is in appeal before us.
The Ld. D.R. submitted that the assessee has not proved the genuineness of the above credits neither before the AO nor CIT(A).
However, CIT(A) deleted the addition without satisfying the genuineness of these credits.
4.1 The Ld. A.R. submitted that before the CIT(A), assessee filed confirmation letter from all the parties and also CIT(A) called for the remand report from the AO and the AO also submitted the reply to remand report and on that basis, CIT(A) rightly deleted addition and the same to be confirmed.
We have heard the rival submissions and perused the materials available on record. In this case, the assessee filed ledger accounts of various parties with signature of those parties before the CIT(A). The Ld. CIT(A) called for the remand report from the AO. AO sent the remand report dated 31.1.2019 to the Ld. CIT(A) wherein he has stated as follows:-
Shri Ramapp Venkategowda, Bangalore
Shri Ramapp Venkategowda, Bangalore
However, the CIT(A) deleted the entire addition on this count. Before us, the Ld. D.R. filed written submission stating that in respect of certain credits the assessee failed to file the confirmation letter from the concerned creditors.
According the Ld. D.R., the assessee has not produced the confirmation letters from all the parties and in cases of parties whose confirmation letters are not available, she submitted that same to be confirmed. 8. The Ld. A.R. not able to controvert the above submission of the Ld. D.R. In view of this, in our opinion, it is appropriate to remit the issue in dispute for re-examination at the end of AO. Accordingly, the issue remitted to the file of AO with the direction to the assessee to prove all the ingredients of section 68 of the Act i.e. identity, creditworthiness and genuineness of transactions in respect of all parties. We also make it clear that the AO shall not make any addition with regard to opening balance shown in the books of accounts at the beginning of the year as unexplained credit. With Shri Ramapp Venkategowda, Bangalore
Page 6 of 6 these observations, we remit these credits to the file of AO for fresh consideration.
The appeal of the revenue partly allowed for statistical purposes.
Order pronounced in the open court on 18th Jul, 2022