VIRENDRA VERMA,NEW DELHI vs. ITO WARD - 46(5), NEW DELHI

We have heard the Learned Representatives of both the parties through video conferencing and perused the material available on record.

Briefly the facts of the case are that A.O. during the course of assessment proceedings noted that in the following cases neither the assessee has been able to prove genuineness nor have provided the confirmations from the parties nor any proof of payment have been submitted. Further in reply to the notice under section 133(6)the concerned sundry creditors have confirmed that during the year no transactions have been made with M/s. K.S. Overseas.

The assessee challenged the additions before the Ld. CIT(A). The written submissions of the assessee is reproduced in the appellate order. The substantial contention of assessee had been that in all these cases the amounts are carry forward balances of the preceding assessment years, therefore, no addition could be made in assessment year under appeal. The Ld. CIT(A) asked the A.O. to file remand report which is reproduced in the appellate order. The Ld. CIT(A) further given an opportunity to the assessee to explain the position. The Ld. CIT(A), however, did not accept the explanation of assessee and dismissed the appeal of assessee on these grounds.

The Learned Counsel for the Assessee reiterated the submissions made before the authorities below. He has referred to PB-7 which is details of the sundry creditor as on 31.03.2014 in which above balances against 03 creditors are appearing. PB-8 is remand report of the A.O. Learned Counsel for the Assessee referring to the remand report submitted that the parties under section 133(6) have confirmed that there were no transactions by the assessee in assessment year under appeal and even in some cases there were nil opening balances. In one case even no notice under section 133(6) could be served upon the creditor. He has referred to PB-15 which is confirmation of M/s. Havels India Ltd., PB-16 is ledger account of this creditor in the books of the assessee. PB-18 confirmation of M/s. Daulat Ram & Sons confirming balance as on 31.03.2014. PB-19 is ledger account of the creditor in the books of the assessee. PB 21 is confirmation of the creditor M/s. International Cargo. PB-22 is ledger account of this creditor in the books of the assessee. Learned Counsel for the Assessee, therefore, submitted that since balances are coming up from the 5 ITA.No.4226/Del./2019 Shri Virendra Verma, New Delhi. earlier year, therefore, no addition could be made against the assessee in assessment year under appeal. Copy of the purchase bills etc., are filed in the paper book in support of the contention. He has submitted that there were no transaction in assessment year under appeal and balances were coming up from the year 2008-2009. Learned Counsel for the Assessee further submitted that balance-sheet of the assessee for preceding A.Y. 2013-2014 was not filed before the authorities below and he is willing to file the same for adjudication of the issue.

The Ld. D.R. relied upon the Orders of the authorities below and submitted that the parties have denied transactions with the assessee which fact is mentioned in the remand report and Order of the Ld. CIT(A). Therefore, no interference is called for in the matter.

We have considered the rival submissions and perused the material on record. It is not in dispute that the impugned balances of the three sundry creditors are appearing in the books of account of assessee as on 31.03.2014. The assessee also filed confirmations and 6 ITA.No.4226/Del./2019 Shri Virendra Verma, New Delhi. ledger account of the creditors which prima facie show that balances were coming up from the earlier years. But, the A.O. in the remand report have specifically mentioned that two parties have submitted reply in response to the notice under section 133(6) i.e., M/s. Havells India Ltd., and M/s. Daulat Ram & Sons that they were having no transactions with the assessee even in earlier years and even in the case of M/s. Daulat Ram & Sons the ledger account shows nil opening and closing balance. In the case of third creditor M/s. International Cargo, notice under section 133(6) could not be served upon them. This has created a doubt in the mind of the authorities below that assessee has not brought the correct facts on record. However, the documents on record and remand report if considered in proper perspective will prima facie make it clear that the impugned amounts of the sundry creditors may not pertain to assessment year under appeal. How they were brought forward of the earlier year and how they have been appearing in the books of account could be verified by filing the balance-sheet of the preceding assessment years,

In the result, appeal of the Assessee allowed for statistical purposes.