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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R.S. SYAL & SHRI VIKAS AWASTHY, JM
आदेश / ORDER आदेश आदेश आदेश
PER R.S.SYAL, VP :
This appeal by the Revenue is directed against the order dated 28-03-2016 passed by the CIT(A)-12, Pune in relation to the assessment year 2011-12.
The first ground is against the deletion of addition of Rs.95,56,157/- on account of unproved sundry creditor.
Briefly stated, the facts of the case are that the assessee declared certain creditors in its balance sheet. On being called upon to furnish confirmation, copies of bills raised by M/s. Mahavir Civil Engineering & Services Pvt. Ltd. for materials purchased from it and also the copies of transportation of bills as per which the material was delivered, the assessee could not comply with the same. This led to the addition of Rs.95,56,157/- on account of unproved sundry creditor. The Ld. CIT(A)
ITA No.1269/PUN/2016 Mohanish Engineering Pvt. Ltd.,
deleted the addition, against which the Revenue has approached the
Tribunal.
Having heard both the sides and perused the relevant material on
record, it is observed that the assessee filed confirmation from the trade
creditor before the Ld. CIT(A) as an additional evidence which could not
be produced before the AO since only a period of 10 days was granted
for doing the needful. The Ld. CIT(A) sent back the copy of confirmation
to the AO and asked for his comments. The AO in his remand report
impressed upon the fact that the assessee failed to prove the
genuineness of the sundry creditor by not submitting the copy of
confirmation during the course of original assessment proceedings. In
Para No.4.4 of the remand report, the A.O. acknowledged the fact that
the assessee did furnish a copy of confirmation, but refused to accept
the genuineness of the creditor on the ground that mere furnishing of
confirmation did not prove the genuineness. We find that the grievance
of the AO in making the addition on account of unproved sundry
creditor was that the assessee failed to furnish the confirmation, which
got satisfied during the course of remand proceedings. In such remand
proceedings, the AO could not find anything negative qua the purchases
made by the assessee from M/s. Mahavir Civil Engineering & Services
Pvt. Ltd. Not only this, the Ld. CIT(A) has recorded in Para No.3.5 of the
impugned order that the AO asked for the confirmation and copies of
bills raised by the creditor, which were duly submitted to him. It is
further undisputed that the said creditor was also assessed with the
same AO. The AO has not brought anything on record to demonstrate
that either the creditor was not genuine or the purchase transactions
were bogus. In view of the foregoing discussion, it is apparent that the
ITA No.1269/PUN/2016 Mohanish Engineering Pvt. Ltd.,
assessee successfully proved the genuineness of the creditor. We
therefore hold that the Ld. CIT(A) was justified in deleting the addition.
The only other ground is against the deletion of addition of
Rs.6,42,939/- made by the AO on account of estimated net profit rate
taken at 6% as against 4.17% declared by the assessee.
The facts apropos this issue are that the assessee declared net
profit at the rate of 4.17%. The AO rejected such profit percentage and
adopted 6% net profit rate for working out the addition of Rs.6,42,939/-
The Ld. CIT(A), after considering the remand report of the AO, preferred
to delete the addition, against which the Revenue has come up in
appeal before the Tribunal.
Having heard the rival submissions and gone through the
relevant material on record, it is observed that the assessee regularly
maintained books of accounts which were duly audited. Recording by
the AO that the assessee did not produce the books of accounts was
controverted by the assessee before the Ld. CIT(A) in terms of non
requisition of such books by the AO. Such finding has not been shown
to be unfounded by the Ld. DR. During the remand proceedings, the
books of accounts were produced before the AO for verification. Except
for the fact that the net profit rate in this year scaled down, the AO has
not given any reason to justify the rejection of book results. In view of
the fact that the books of accounts were produced admittedly during
the course of remand proceedings and the AO could not find any defects
in such books, we are of the considered opinion that no fault can be
found with the Ld. CIT(A) in deleting the addition, which was made by
the AO by applying an ad hoc net profit rate of 6% as against 4.17%
ITA No.1269/PUN/2016 Mohanish Engineering Pvt. Ltd.,
declared by the assessee. We therefore, approve the view taken by the
ld. CIT(A).
In the result, the appeal filed by the Revenue is dismissed.
Order pronounced in the Open Court on 23rd October, 2018.
Sd/- Sd/- (VIKAS AWASTHY) (R.S.SYAL) �याियक सद�य �याियक �याियक �याियक सद�य सद�य /JUDICIAL MEMBER उपा�य� सद�य उपा�य� उपा�य�/ VICE PRESIDENT उपा�य�
पुणे Pune; �दनांक Dated : 23rd October, 2018 सतीश
आदेश क� आदेश क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to : आदेश आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत
अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. आयकर आयु�(अपील) / The CIT (Appeals)-12, Pune. 3. आयकर आयु� / The Pr. CIT Central, Nagpur 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “बी 5. बी बी” / DR ‘B’, बी ITAT, Pune; गाड� फाईल / Guard file. 6.
आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER,स आदेशानुसार
// True Copy //
Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune. *