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Income Tax Appellate Tribunal, ‘A’BENCH,
Before: Shri M.Balaganesh & Shri S.S.Viswanethra Ravi
This appeal by the Revenue is directed against the order dated 05-08-2013 of the Commissioner of Income Tax (Appeals), XII, Kolkata for the assessment year 2006-07.
The appellant revenue has raised the following effective grounds of appeal:- 1) Whether on the facts and circumstances of the case the ld. CIT(A)-XII, Kolkata was right on deleting the additions made on the claim of bad debts written off Rs.87,450/- 2) Whether on the facts and circumstances of the case the CIT(A)- XII, Kolkata was right on deleting the additions made on the claim of loss on account of Foreign loss Rs.4,32,836/-. M/s. Attire Arts Pvt. Ltd 1
3) Based on the facts and circumstances of the case the ld. CIT(A)-XII, has erred in allowing the travelling expenses of Rs.2,66,504/-. 4) Whether on the facts and circumstances of the case the ld. CIT(A)-XII, Kolkata was right on deleting the additions made on account of unplained case credits. From the Remand Report submitted by the Assessing Officer it is seen that No reply was received from Shri Birju Singh Sekhwat and M/s. Birju Singh Sekhwat & Sons that two persons from whom loan were taken. Further, the bank accounts of the persons (i) Kishore Singh Kumar (ii) Kishore Singh Kumar (HUF) the other two persons from whomeloans had been taken had shown cash deposits of identical amount on the same date on which the loans were advanced by them. And (iii) Karniram Dayal an amount of Rs.3,50,000/- was cleared on and the next day the same amount of loan was advanced. The above facts were not explain.
Brief facts of the case are that the Assessee is a company and engaged in export business and filed its return of income on 31-10-06 declaring a total income of Rs.11,43,270/-. Under scrutiny, notices u/s. 143(2) and 142(1) of the Act were issued. In response to which, the assessee appeared and filed details in support of its return filed. Basing on which the AO determined the income of the Assessee at Rs.60,26,660/- and passed the assessment order on 31-12-08 u/s. 143(3) of the Act by making the following additions to the income of the assessee:-
Under the heads Amount of addition/ disallowance by the AO 1)Bad Debts W/off Rs. 87,450/- 2)Foreign Exchange loss Rs. 4,32,836/- 3)Travelling & Conveyance Rs. 2,66,504/- 4)Telephone expenses Rs.40,16,706/-
Ground no.1 relates to deletion of addition of Rs.87,450/- made on account of written off bad debts.
During the scrutiny proceedings, the AO found that the assessee has debited an amount of Rs.87,450/- on account of bad debts written off. In explanation, the assessee submitted that the recovery measures have been undertaken to recover
M/s. Attire Arts Pvt. Ltd 2 such debts, thereby the same were written off. The AO not satisfied with the explanation as offered by Assessee added the same to the total income of the Assessee.
Before the CIT-A the assessee contended that the amount of bad debts representing the amount not realized on account of exports made in the financial year 2002-03. The said amount was written off as bad debts, which was offered as income in the previous year in which the sale transaction was occurred. The CIT-A having satisfied with the explanation as offered by the assessee deleted the said addition by stating as under:- “Before me, it is submitted on behalf of the appellant that during the assessment proceedings the appellant had details of bad debts claimed informing the Assessing Officer that the amount of bad debts represented the amount not realized on account of exports made in the financial year 2002-02, and that the exports were insured with ECGC pf India ltd, the amount lying unrealised after receiving claims from ECGC were written off as bad debts. It is contended that the disallowance has been made without considering the facts of the case. It is also argued that the transactions occurred between the parties were of revenue in nature and sale to the customers are, as a matter of accounting principle credited to the profit & loss account of an enterprise. It is submitted that the amount claimed as bad debts were offered for income in the previous year in which the sale transaction occurred. It is further submitted that the exports were insured with the ECGC of India Ltd and that the payment of claim by ECGC is a monetary transaction which financially affects the insurer and as a prudence they are more concerned about the recovery measures by the insured. The claims were passed by ECGC and confirm the measures taken by the appellant within their business prudence cannot be doubted. In support of the claim, the appellant filed before me evidences in the form of bills raised, payment and claims received along with relevant documents. I have carefully considered the submissions made. The principles for allowing bad debts has been discussed in Travancore Tea Estates Co. Ltd V. CIT [1992] 197 ITR 528(Ker), wherein it has been held that the burden of proof that there is debit owing to the assessee that it has been taxed in the earlier years, that the debit arose in the course of business of the assessee and finally, that it had become bade in the year o account, is all on the assessee. The documents furnished by the appellant company and the explanation offered before the Assessing Officer and those reiterated before me show that it has discharged its burden of proof. Apparently, the entries written of do not appear fake, but genuine, It is not the case of the of the Assessing Officer, on the strength of any material on record, that the debts written off is fake or non-genuine. The appellant company has written of the balance amounts after set off of the claim received from the insurance company. In the case of T.R.F Ltd Vs. CIT (2010) 323 ITR 397(SC), the issue involved was whether it is mandatory for assessee from 01.04.1989 [(after amendment in section 36(1)(vii)] to establish that debts had become bad on merely writing off the debts as irrecoverable in the accounts is sufficient. The Hon’ble Supreme Court has held that it is not necessary for assessee to establish that debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in ITA No. 2618/Kol/13
M/s. Attire Arts Pvt. Ltd 3 the accounts. Having regard to the facts and the legal propositions, in my view, the appellant company has fulfilled the conditions laid down under sec 36 (1)(vii) read with sec. 36(2) of the Act. Therefore, the claim of bad debts written off in the books in the present assessment year is allowed. The appellant gets relief of Rs.87,450/- on this ground. This ground of appeal is accordingly allowed. “
7. Before us, the ld.DR relied on the order of the AO in disallowing the impugned addition.
8. On the other hand, the ld.AR of the assessee submits that all the details of bad debts were filed before the AO and without considering the same the AO disallowed. The same details were considered by the CIT-A and basis on which, he deleted the said addition. He further submits that the exports were insured with the ECGC India Ltd and the payment of claim was passed by M/s. ECGC. The assessee filed by way of evidences in the form of bills raised, payment and claims received along with relevant documents before the CIT-A.
9. Heard rival submissions and perused the material available on record. It is observed that the CIT-A acknowledged in the first appellate proceedings that all the details were available before the AO. We also find that the impugned amount disallowed on account of writing off bad debts represents the amount not realized on account of exports made in the FY 2002- 03 and the same were written off after the receipt of payment of claims from ECGC. The exports were insured with ECGC and the amount lying unrealised after receiving claims from ECGC were written off as bad debts. We find that the CIT-A rightly observed that all the details were available before the AO and without considering the facts of the case the AO made this addition/disallowance. Therefore, we find no reason to interfere M/s. Attire Arts Pvt. Ltd 4 with such order of the CIT-A in deleting the same. Thus, this ground no-1 of revenue is dismissed.
10. Ground no.2 is relating to deletion of addition of Rs.4,32,836/- on account of loss due to fluctuation in foreign exchange rate.
11. The AO found that the assessee debited an amount of Rs.4,32,836/- on account of loss due to fluctuation of foreign exchange rate. According to AO, it was notional loss as there was no actual loss and the assessee given only the net figure of foreign exchange loss and as there was no transaction taken place. Accordingly, he disallowed the said amount as assessee not substantiated whether such loss was actual in nature and added the same to the total income of the assessee.
12. Before the CIT-A the assessee submitted the export invoices raised on prevailing exchange rate and bank credits in the account as per exchange rate prevailing at the time of receipt of payments. The assessee entered the difference at prevailing rates on the invoices raised and the money receipts as gain or loss and submitted the details of transactions showing the profit and gains. The CIT-A after examining the details directed the AO to allow the said loss as business loss by stating as under:- “On behalf of the appellant, learned A/R of the appellant submitted that whenever export invoices are raised, the same is book in account at the prevailing exchange rate, whenever payments are received, bank credits the proceeds in the account as per exchange rate prevailing at the time of receipt; there is always some difference in the exchange rate at the time of raising of export invoice and at the time of realization. Such difference, it is submitted, is recognized in the books of accounts as foreign exchange fluctuation gain/loss. It is pointed out that the said accounting treatment is in accordance with Accounting standard AS-II- the effect for changes in foreign exchange rates. It is further submitted that the appellant has M/s. Attire Arts Pvt. Ltd 5
accounted for the foreign exchange transactions in accordance with the said AS-II, which is applicable to all enterprises as per Companies Act, 1956. All such transactions are monetary transactions and are not notional transactions as held by the Assessing Officer. The appellant furnished details of transaction wise profit/gains on each foreign exchange transaction entered into during the year under consideration to prove that none of the transactions was notational in nature and loss has actually incurred. I have considered the facts of the case and the material brought on record and also submissions put forth on behalf of the appellant. In the case of CIT v. Canara Bank Ltd [ 1967] 63 ITR 328 (SC), it has been held that if by virtue of exchange operations profits are made during the course of business and in connection with business transactions, the excess receipts on account of conversion of one currency into another would be revenue receipts. But if the profit by exchange operations comes in, not by way of business of the assessee, the profit would be capital profit. Conversely, the loss incurred in the case of exchange operations during the course of business and in connection with business transactions the deficit on account of conversion of one currency into another would be revenue loss. In this view of the matter and in view of the accounting standard followed by the appellant company, I am inclined to accept the submission of the appellant that none of the transactions was notional in nature and loss has actually been incurred due to foreign exchange fluctuation. The resultant loss as claimed by the appellant is held to be actual business loss liable to deducted from the profits. The Assessing Officer is hereby directed to allow the said loss as business loss. The appellant would get relief of Rs.4,32,836/- on this ground.”
Before us the ld.DR has relied on the order of the AO in making the said disallowance.
On the other hand, the ld.AR of the assessee has reiterated the same submissions as made before the CIT-A and relied on the impugned order of the CIT-A on this issue.
Heard rival submissions and perused the material available on record. We find force in the submissions of the assessee, wherein the assessee furnished all such details of transaction of foreign exchange transaction. The CIT-A after examining the same directed the AO to delete the said addition on this count. We find no reason to interfere with the finding of the CIT-A on this issue. Thus, this ground no. 2 of revenue is dismissed.
M/s. Attire Arts Pvt. Ltd 6
Ground no-3 is relating to allowance of travelling expenses of Rs.2,66,504/-.
The AO found that the assessee has debited an amount of Rs.14,28,706/- on account of foreign travelling expenses. Out of such expenditure, the assessee debited/incurred towards foreign travelling undertaken by its Director of Rs.11,04,523/- and for non director, Miss Moumita Banerjee is of Rs.2,27,999/. The AO found that an element of personal use and for the non submission of any details in support of this expenditure, the AO disallowed Rs.2,66,504/- being 20% of above expenditure and added the same to the total income of assessee.
Before the CIT-A the assessee contended that foreign travel is an integral part of business process since it is engaged in a export business and its Directors would visit the customers abroad to maintain and justify its business process irrespective of orders from the customers abroad. The CIT-A found that the said addition has made by the AO on ad-hoc basis without specifically pointing out any item of expenditure that so incurred being personal in nature and thereby he deleted the impugned addition by stating as under:- “On behalf of the appellant, it is submitted that the appellant is pre- dominantly engaged in export business and almost hundred percent turnover is on account of export. It is submitted that travelling forms an integral part of business process irrespective of the immediate gain out of any particular travelling. It is contended that an entrepreneur has to visit the customers irrespective of the fact whether any orders have been secured in that particular visit and that it is also not possible for a businessman to maintain record to justify how each and every visit has helped in his business. It is also contended that if there is no travelling, which is an integral part of the business process of the appellant, the business would suffer immediately and there would be de-growth. It is explained that the travelling expenses had been incurred wholly and exclusively for business purposes and that there is no personal element involved therein. I have considered the submission. The appellant company is already in the business of exporting garments. It is not the case of the Assessing Officer that the expenditure was incurred in connection with setting up of M/s. Attire Arts Pvt. Ltd 7
new business. The disallowance has been made on ad hoc basis without specifically pointing out any items of expenditure of personal nature. Keeping in view the facts of the case, foreign travel cannot be considered to be for non-business purposes. The expenditure is allowable as revenue expenditure. The addition on account of such disallowance at Rs.2,66,504/- is, therefore, deleted. “
Before us the ld. DR has relied on the order of the AO.
On the other hand the ld.AR urged us to adopt the same submission as made before the CIT-A and supported the finding of the CIT-A in doing so.
Heard rival submissions and perused the material available on record. We find that the AO noted that no details were furnished in support of claim towards foreign travel expenditure. The AO disallowed the same @ 20% of Rs.11,04,523/- on ad-hoc basis without making specifically pointing out of any items of expenditure incurred being personal nature. The CIT-A taking into consideration the nature of assessee’s business as the assessee is engaged in @100% exports business found satisfied with the submissions of assessee. Therefore, we find no reason to interfere with the order of the CIT-A in deleting the said addition. This ground no- 3 of revenue’s appeal is dismissed.
Ground no-4 is relating to deletion of addition of Rs.40,16,706/- on account of unexplained cash credit u/s. 68 of the Act.
The AO found that the assessee has obtained loans from the following persons apart from its Directors, family members of Directors and their respective HUF’s:- M/s. Attire Arts Pvt. Ltd 8
Name Sl.No Address Closing Rate of interest Balance 1 Baikunth Nath Mishra 5, Burro Shibtalla Main 4,39,514 9% Road, Kolkata-38 2 Baikunth Nath Mishra & Sons (HUF) 5, Burro Shibtalla Main 3,26,773 9% Road, Kolkata-38 3 Birju Singh Shekhwat 5, Burro Shibtalla Main 5,51,185 9% Road, Kolkata-38 4 Kishore Singh Kumar 21, Chanditala Main 3,09,312 9% Road,Kol-53 5 Kishore Singh Kumar (HUF) 21, Chanditala Main 1,55,544 9% Road,Kol-53 6 Birju Singh Shekhwat & Sons (HUF) 5, Burro Shibtalla Main 1,67,482 9% Road, Kolkata-38 7 Karni Ram Dhayal 5, Burro Shibtalla Main 4,62,910 9% Road, Kolkata-38 8 Suraj Kumar Shaw 121/6A, Circular Garden 2,52,484 9% Reach Road, Kol-23 9 Saurabh Poddar 9C, Mathur Sen GarLane, 2,54,539 9% Kol-6 10 NK Poddar & Sons (HUF) 9C, Mathur Sen GarLane, 4,57,861 9% Kol-6 11 Sudha Devi poddar 9C, Mathur Sen GarLane, 3,05,447 9% Kol-6 36,85,051
To verify the above the AO deputed an inspector who vide his reports dated 27-11-08/ 03-12-08 stated that none of such persons existed in their respective addresses. Thereafter, the AO issued summons u/s. 131 of the Act, which was affixed on their addresses as supplied by the assessee. The AO was of the view that the assessee failed to prove the identity and genuineness of all creditors and as such he added the amount of Rs.40,16,706/- u/s. 68 of the Act.
Before the CIT-A the assessee contended that the amount to an extent of Rs.36,85,051/- was brought forward balance as on 01-04-2005, being the amount not credited during the year and the other amount of Rs.3,31,655/- was interest accumulated, which was credited to the respective loan creditors account. Further, the assessee contended before him that all details of loan creditors along with their respective PANs were submitted before the AO. The report, which has been M/s. Attire Arts Pvt. Ltd 9 filed by the Inspector was never confronted with the assessee. Taking into consideration the submissions of the assessee, CIT- A sought remand report from the AO. The CIT-A found that the AO did not make any adverse comments against the loan creditors at Sl.no’s 1 to 6 above. Regarding the creditors at Sl.No’s. 7 and 8, the CIT-A found are one and the same representing individual and another representing the HUF for which the assessee submitted before the CIT-A that the said Karta, Birju Singh Sekhwat was expired on 24-07-2007 and to that effect a certificate was filed before the CIT-A by way of paper book. The CIT-A found regarding the other creditors at Sl.No’s 9, 10 & 11, that the AO did not doubt the identity of said creditors, but only doubted the creditworthiness and genuineness of the transactions. Accordingly, the CIT-A on being satisfied with such remand report as there was no adverse comments made by the AO deleted the said addition by stating as under:-
“I have carefully considered the facts of the case, the material placed on record and the explanation offered by the appellant. Regarding the first six creditors, the Assessing Officer has forwarded the reports of the Inspector without any comments. On going through the inspector’s report, I find that the Inspector’s report coupled with the documents furnished in respect of the credits during the assessment proceedings confirms the identity of the persons who have given loan to the appellant and confirms the genuineness of the transactions with the appellant. The inspectors report confirms the identity, place of residence, income tax PAN, details of transactions of loan creditors with the appellant both from bank statements and their assessment records. This being so, I have no hesitation in holding that the appellant has discharged its onus of proof by establishing the identity of the creditors, their credit-worthiness and genuineness of the transactions. Apparently, provisions of sec. 68 are not attracted in these cases. Therefore, the addition made in respect of the principal amounts and disallowance of interest accrued on those credits in respect of the first six creditors is liable to be deleted. As regards creditors at Sl. Nos. 7 and 8, the Assessing Officer has reported that he had not received any response to notice under sec. 133(6) of the Act. The appellant’s submission is that the creditor Shri Birju Singh Sekhwat had already expired on 24/07/2007 and as such no reply had been received either from his or the HUF of which he was karta. Both Birju Singh Sekhwat and Birju Singh Sekhwat & Sons have filed their return of income for asst year 2006-07. Copy of acknowledgement of return and their statement of affairs as on 31 s t March, 2006 which included loan to the appellant along with copy of loan confirmation duly signed has been filed along with the paper book. Having regard to the facts, in my opinion, the M/s. Attire Arts Pvt. Ltd 10 appellant has discharge its onus of proof. It cannot be said that the appellant has shown to have received the loans from non-existing persons.
Regarding other three persons from whom replies have been received namely (a) Kishore Singh Kumar, Kishore Singh Kumhar HUF, and Karniram Doyal, the Assessing Officer has not apparently doubted the identity of the creditors. He has doubted the genuineness of the transactions on the ground that the relevant bank statements were not filed. The appellant has, on the other hand, furnished details of the bank on which the cheques have been drawn by the creditors and the statement of affairs/cash flow chart furnished showed availability of funds as on the date on which the cheques were issued. Considering the facts, in my view, the appellant has discharged its initial burden of proving the identity of the loan creditors, their capacity and also the genuineness of the transactions by filing documentary evidence on record. Confirmation letters were made available, transactions were by cheques. The creditors also responded to notices under section 133(6) of the IT Act.
In S.K Bothra & Sons, HUF v. ITO [2011] 203 Taxman 436 (Kol), it has been held that “it is settled law that while considering the question whether the alleged loan taken by the assessee was a genuine transaction, the initial onus is always upon the assessee and if no explanation is given or the explanation given by the assessee is not satisfactory, the Assessing Officer can disbelieve the alleged transaction of loan. But the law is equally settled that if the initial burden is discharged by the assessee by producing sufficient materials in support of the loan transaction, the onus shifts upon the Assessing Officer and after verification, he can call for further explanation from the assessee and in the process, the onus may again shift from the Assessing Officer to the assessee. However, the Assessing Officer would not be justified if he merely directed the inspector to verify the statements, and later on the basis of his report, straightaway arrive at the conclusion that the transactions were not genuineness without giving further opportunity to the assessee to explain the alleged information disclosed by the Inspector to the Assessing Officer.”
Now, in the appellant’s case, verification of the credits through the Inspector of Income-tax a second time and calling for information under sec. 133(6) did not bring any material on record to establish that the appellant could not prove the identity of the creditors, their credit-worthiness or the genuineness of the transactions. In CIT v. P. Mohankala [2007] 291 ITR 278 (SC), the observation of the Hon’ble Supreme Court is that “It is true that the opinion of the Assessing Officer for not accepting the explanation offered by the assessee as not satisfactory is required to be based on proper appreciation of material and other attending circumstances available on record. The opinion of the Assessing Officer is required to be formed objectively with reference to the material available on record. Application of mind is the sine qua non for forming the opinion.” In the present case, there is no material brought on record to establish that the appellant has not discharged its onus of proving the identity of the creditors, their credit- worthiness or the genuineness of the transactions. Therefore, the addition made by the Assessing Officer on account of unexplained cash credits as income of the appellant under sec. 68 of the IT Act is not tenable.
It may also be noted that the aforesaid 11 loan creditors amounting to Rs.36,85,051/- is, in fact, brought forward balances as on 1 s t April, 2005. Based on the report of the Income tax inspector dated 27 t h Dec. 2008 and 3 r d December, 2008, which stated that the loan creditors were not found at the address given in the Loan confirmation and thus not available, added back the entire opening balance of Rs.36,85,051/- along with interest credited to their account being Rs.3,31,655/- totalling to Rs.40,16,706/- as unexplained cash credit. In CIT vs. Orissa Steel Corpn Pvt. Ltd (1982) 31 CTR (Cal) 160 (1983) 144 ITR 662 (Cal) and CIT v. Chhyaban (P) Ltd (1980) 121 ITR 644 (Cal), it has been held that in a case where the cash credits appeared in the books before 1 s t April, 1961, but the previous year of the assessee was such as to be relevant to the assessment year 1962-63, the cash credits would be assessable under section 68 for the assessment year 1962-63. The Karnatka ITA No. 2618/Kol/13
M/s. Attire Arts Pvt. Ltd 11
High Court has taken a contrary view in Sterling Corporation and Trading Co. vs. ITO (1976) 102 ITR 43 (Kar). According to the Karnataka High Court, where the undisclosed income related to the financial year 1960-61, they could be assessed as the income of the assessment year 1961-62 only and not of the asst. year 1962-63. However, where the assessee’s explanation that the amount credited in the relevant previous year relates to an earlier year is accepted,then section 68 cannot be invoked to tax the relevant credit amount as the income of the previous year – CIT vs. Om Prakash Mahajan & Sons (1984) 152 ITR 583(Del). Following this legal proposition, even if it is assumed that the brought forward cash credits deemed to be the income of the appellant, the same could not be added as the income of the previous year. In the light of the above discussion and observation and having regard to the facts and circumstances of the case, the addition of Rs.40,16,706/-, made by the Assessing on account of unexplained cash credits deeming the same as income of the appellant under sec. 68 of the IT Act is hereby directed to be deleted. Thus this ground of appeal of the appellant is accordingly allowed. “
26. Before us the ld.DR relied on the order of the AO in making such addition/disallowance. He also submits that the CIT-A did not examine the issue in a proper manner. The CIT-A has given relief only on satisfaction that all the transactions were made through cheques.
On the other hand, the ld.AR of assessee has reiterated the same submissions as made before the CIT-A and supported the impugned order of the CIT-A on this issue.
Heard rival submissions and perused the material available on record. We find that the CIT-A examined the remand report and satisfied with the AO did not make any adverse remarks regard to Sl. No’s. 1 to 6. We also find that the CIT-A examined in detail the Inspector’s report coupled with the documents as furnished in respect of the credits during the assessment proceedings confirmed the identity of the persons who have given loan to the Assessee and confirms the genuineness of the transactions with the Assessee. Basing on the inspectors report the CIT-A confirmed the identity, place of residence, income tax M/s. Attire Arts Pvt. Ltd 12 PAN, details of transactions of loan creditors with the assessee taking into consideration the bank statements and their assessment records. In view of the same , we do not find any reason to interfere with the order of CIT-A and it is justified, therefore, we delete the addition regarding creditotors at Sl.No’s 1 to 6.
From the order of the CIT-A found, wherein it was stated by him that the loan creditor at Sl. No. 7 is a Karta of loan creditor representing HUF at Sl. No. 8 and the said Karta was died on 24-07-2007 and to that effect a certificate was filed before the CIT-A by way of a paper book. It is observed that the creditors at Sl.No’s 7 & 8 have filed their return of income for A.Y 2006-07 along with a copy of acknowledgement of return and their statement of affairs as on 31-03- 2006 including the loan to the assessee along with copy of loan confirmation duly signed filed along with the paper book before the CIT-A. We find that the CIT-A examined the return of income for the AY 2006-07 along with statement of affairs as on 31-03-06, which includes confirmation of loan given to assessee by way of paper book. Therefore, the three ingredients of section 68 are fully satisfied. Thus, the addition regarding Sl.No’s 7 & 8 are not maintainable and accordingly deleted.
The loan creditors at Sl. No. 9,10 and 11 of the above chart the AO doubted only the creditworthiness of such parties. The CIT-A examined the relevant details, their capacity and genuineness of the transactions and found satisfied that the said transactions were routed through banking channel by M/s. Attire Arts Pvt. Ltd 13 cheque. Therefore, we do not see any reason to interfere with the order of the CIT-A in deleting the impugned addition involving creditors at Sl.No’s 9,10 and 11, accordingly deleted, Besides, it is pertinent to note that the amount of Rs.36,85,051/- was only brought forward balances as on 01-04- 05. The remaining sum of Rs. 3,31,655/- is only interest accrued thereon. Hence, we hold that no addition u/s. 68 of the Act could be made on the opening balance of loan creditor as deemed income of the previous year. Therefore, this ground no- 4 of revenue’s appeal is dismissed.
In the result, the appeal of revenue is dismissed. ORDER PRONOUNCED IN OPEN COURT ON 03-02-2017 Sd/- Sd/- M.Balaganesh S.S. Viswanethra Ravi Accountant Member Judicial Member Dated 03/02/2017 Copy of the order forwarded to: 1. The Appellant/department: Income Tax Officer, Ward- 12(3) Aayakar Bhavan, 7th Floor, P-7 Chowringhee Sq, Kolkata-69. 2 The Respondent/assessee: M/s.Attire Arts Pvt. Ltd (Formerly Nishant Overseas Pvt. Ltd Ltd 1 Swastik Building, 1st Floor, 1 Sardar Sankar Road, Kolkata-26. 3 /The CIT(A) 4.The CIT
DR, Kolkata Bench 5.