M/S. ECONOMIC ELECTRICAL INSTRUMENT PVT. LTD.,HAPUR vs. ITO, HAPUR

This appeal filed by the assessee is directed against the order passed by the CIT(A) on 12.12.2014 in relation to the Assessment Year 2010-11.

The Department has requested for adjournment in all the cases, including the present case, fixed today for hearing before the Bench by giving the reason that: “Sr. DR is not available.” There is neither any one from the side of the Revenue to represent the Revenue nor to explain the reasons as to why the Bench be allowed to crash. The ld. AR strongly opposed to the granting of adjournment. I am satisfied that the Revenue’s prayer for adjournment cannot be accepted. The same is, therefore, rejected and the appeal is being taken up for disposal on merits ex parte qua the Revenue.

The only issue raised in this appeal is against the confirmation of addition of Rs.16,77,847/- towards unexplained outstanding creditor liability.

Briefly stated, the facts of the case are that the assessee is engaged in the business of trading of electrical items. Certain purchases were made during the year. The AO conducted inquiry during the course of assessment proceedings from the suppliers of the assessee. Two parties, namely, M/s Gayatri Traders and M/s Lov Marketing did not respond to the AO’s summons. Total amount standing credit to the accounts of these two parties at Rs.16,77,847/- was, therefore, added by the AO as unexplained liability. The ld. CIT(A) affirmed the same.

I have heard the ld. AR and perused the relevant material on record. These two amounts represent purchases made by the assessee on different dates from these two parties. Confirmed copies of accounts of these two suppliers are available on record. Not only that, copies of account of these two parties for subsequent years in which payment was made against supplies received during the year, are also available on record. Copies of purchase bills which led to the passing of credit entries in respect of these two parties have also been provided in the paper book. This overwhelming evidence clearly shows that the assessee made purchases from these two parties and made payment in subsequent years. The mere fact that the assessee was having sufficient cash in hand, cannot be a reason to treat purchases made on credit as non-genuine as has been recorded by the AO. I, therefore, accept the genuineness of the purchases and these two credits and, accordingly, delete the addition.

In the result, the appeal filed by the assessee is allowed.