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Income Tax Appellate Tribunal, “B” BENCH: KOLKATA
Before: Shri Rajesh Kumar & Shri Sonjoy Sarma]
ORDER
Per Shri Sonjoy Sarma, JM:
This appeal is preferred by the assessee against the order of Ld. CIT(A)-8, Kolkata [hereinafter referred to as ‘CIT’] dated 24.08.2020 passed u/s 250 of the Income-tax Act, 1961. The assessee has taken the following grounds of appeal:
i. For that in the facts and circumstances of the case, the ld. CIT(A) was not justified in sustaining the addition of Rs. 6,18,500/- on account of bogus sundry creditors. ii. For that in the facts and circumstances of the case, the ld. CIT(A) failed to construed that merely because notice u/s 133(6) was returned back as unserved cannot be a basis to treat such creditors as bogus. iii. For that it is settled law that non-compliance of notice u/s 133(6) cannot and should not be the basis of addition. In the case of Uem India Pvt. Ltd. vs ACIT, Hon’ble ITAT Delhi Bench has held that disallowance only on the ground of uncomplied notices u/s 133(6) and non-consideration of evidences filed by the assessee during appellate proceedings cannot be approved.
Brief facts of the case are that the assessee filed its return of income on 06.10.2010 declaring total income of Rs. 41,57,225/-. The case of the assessee was selected for scrutiny and subsequent to the notices u/s 143(2) and 142(1) were issued
Eastern Engineers And Associates and duly served upon the assessee. In response to the notice, the ld. AR of the assessee appeared from time to time and filed details. While framing the assessment, the ld. AO found that the difference of Rs. 35,65,148/- is added to the total income of the assessee due to discrepancies were found in certain transactions. The AO issued letter u/s 133(6) to the following parties:
Sl. No. Name of the party Amount of purchase shown by the assessee (Rs.) 1 Filarc Engineers Pvt. Ltd., 505 Mukti 1,07,951/- Chambers, 4, Dr. Rajendra Prasad Sarani, Kolkata-700001. 2 Alstom Projects India Ltd., C/o.Everbright 6,72,964/- Warehousing, NG-6, Chamrail, Liluah, Howrah- 711204. 3 Steel Authority of India Ltd. (Howrah) 22, G.T. 4,89,353/- Road, (South), Howrah Maidan-711101. 4 Jain Ispat, P-1, Kalakar Street, Kolkata-7 71,57,112/- Total 84,27,380/- However, the parties are non-existent and the ld. AO added Rs. 84,27,380/- as bogus purchase in the hands of the assessee. During the course of hearing, the ld. AR of the assessee submitted details of sundry creditors list and the following sundry creditors were written off which were more than 10 years old namely Sl No. Name of the party Amount (Rs.) 1 Girija Tubes & Pipes (P) Ltd. 2,18,717/- 2 Filare Engineering Pvt. Ltd. 1,07,951/- 3 B.P. Enterprises 1,45,205/- 4 M.L. Chowdhury & Sons 27,419/- Total 4,99,292/- While framing the assessment, the ld. AO added a sum of Rs. 4,99,292/- in respect of liabilities of parties and since they were very old, therefore, added to the income of the assessee. Further he added sundry creditors of Rs. 6,18,850/-against M/s. Baba Engineering and the address provided by the assessee where notice u/s 133(6) was issued returned unserved by the postal authority with the remark “not known” and, therefore, ld. AO added the sundry creditors of Rs. 6,18,850/- while framing the assessment.
Eastern Engineers And Associates
Dissatisfied with the above order, the assessee preferred an appeal before the ld. CIT(A). However, the appeal of the assessee was partly allowed by the ld. CIT(A).
Aggrieved by the order of the ld. CIT(A), assessee preferred an appeal before the Tribunal raising three grounds of appeal and had filed an additional ground of appeal vide application dated 16.02.2022 and we considered the additional ground raised by the assessee for adjudication.
At the time of hearing no one appeared before this Tribunal on behalf of the assessee. Although, the registry has issued notice upon the assessee but no compliance has been taken from the side of assessee. Therefore, we have no other alternative to deciding the appeal with the assistance of ld. CIT, DR.
We after going through the material available on record and perusal of the impugned order passed by the authorities below and circumstances of the case, we find that the main grievance of the assessee in this appeal is sustaining the addition of Rs. 6,18,500/- on account of bogus sundry creditors. Further, the addition of old credit balance amounting to Rs. 4,99,291/-. The assessee raised in the grounds of appeal that it is settled principle of law that non-compliance of notice u/s 133(6) cannot be a sole ground for addition and in the case of Uen India Pvt. Ltd. vs ACIT, Co-ordinate Bench of ITAT Delhi has held that disallowance only on the ground that uncomplied notice u/s 133(6) and non-consideration of evidence filed by the assessee during appellate proceeding cannot be approved. Since at the time of hearing none appeared before us on behalf of the assessee neither the assessee filed any documents in support to substantiate its claim. Therefore, interest of justice, we remand back the whole issue to the file of ld. AO to examine the limited issue in present appeal raised before us afresh after giving reasonable opportunity to the assessee to substantiate its claim. The assessee is also directed to furnish such document before the ld. AO so as to facilitate
Eastern Engineers And Associates the AO for passing speaking order and should not seek adjournment unless otherwise required for reasonable cause.
In the result, the appeal of the assessee is allowed for statistical purpose. Order is pronounced in the open court on 15th September, 2022