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Income Tax Appellate Tribunal, DELHI BENCH “Meerut Camp” Mererut
Before: SHRI I.C. SUDHIR & SHRI PRASHANT MAHARISHI
ORDER
PER I.C. SUDHIR: JUDICIAL MEMBER The assessee has questioned first appellate order on the sole ground that the Learned CIT(Appeals) erred in sustaining the addition of Rs.4,42,242 as unexplained credit under sec. 68 of the Income-tax Act, 1961.
Heard and considered the arguments advanced by the parties in view of orders of the authorities below, material available on record and the decisions relied upon.
The facts in brief are that Assessing Officer had made addition of Rs.1,86,72,234 under sec. 68 of the Act on the basis that the creditors had 2 not confirmed the account of the assessee. It was questioned before the Learned CIT(Appeals). The Learned CIT(Appeals) being satisfied with the explanation of the assessee has restricted the addition to Rs.4,42,242 on the basis that the explanation of the assessee with respect to transaction with Valm Foam (P) Ltd. (difference of Rs.3 lacs), M/s. Jasch Industries (difference of Rs.1 lac) and M/s. Hiren Sinha & Co. (difference of Rs.42,242) was not supported with positive evidence. This action of the Learned CIT(Appeals) has been questioned by the assessee .
In support of the ground, the Learned AR submitted that in the case of Valm Foam (P) Ltd., balance was short by Rs.3,00,040. As per copy of account obtained from the creditor, cheque No. 619471 was credited, whereas no such cheque was given to creditor, in as much as series of cheque number was mentioned was not issued from ICICI Bank Ltd., Meerut, which was clear from all other cheques mentioned by the creditor. The Assessing Officer without verification from the creditor held that the balance disclosed by the assessee exceeded Rs. 3 lacs, which has been upheld by the Learned CIT(Appeals). The Learned AR argued that it is not understood as to how the cheque not issued from the ICICI Bank Ltd., Meerut has been treated of the assessee in absence of verification from the 3 bank or from the creditor. From the verification from the creditor, it was revealed that this was a wrong posting, which was rectified in the assessment year 2009-10.
4.1 Regarding the difference of Rs. 1 lac in the case of Jasch Industries Ltd., the Learned AR submitted that the assessee had disclosed the credit of Rs.2,26,097 as against Rs.1,26,973 by creditors, however, on examination from the ledger, it was revealed that purchase on 20.10.2007 for Rs.65,000 and 30.10.2007 for Rs.35,000 was credited in the above account as against incorrect name of creditors Jaiswal Clothe by mistake and it was submitted that rectification was made in the subsequent year. The Learned CIT(Appeals) was thus not justified in upholding the addition.
4.2 Regarding the addition of Rs.42,247 in the case of Hiren Sinha & Co., the Learned AR submitted that on examination of books of account, bills dated 10.4.2007 for Rs.60,000, 25.4.2007 for Rs.65,000, 20.5.2007 for Rs.60,000, 28.5.2007 for Rs.60,000 and 06.06.2007 for Rs.55,000, totaling to Rs.3 lacs were not found available at the time of examination. However, other bills were found and properly checked. The Assessing Officer did not obtain the copy of account of creditors and the creditors supplied the details 4 of bills for Rs.2,97,897 for assessment year 2009-10 only. On the basis of which, the Assessing Officer rejected the explanation and made the disallowance of Rs.42,242. Since all the differences were duly reconciled through letters dated 19.3.2014 and 31.3.2014, the addition has wrongly been sustained by the Learned CIT(Appeals). In support of above explanation, the Learned AR has referred page Nos. 14 to 43 of the paper book which are copies of replies made before the Assessing Officer, explanation regarding the reconciliation in the case of Valm Foam Pvt. Ltd., Jasch Industries and Hiren & Co., their confirmation, reconciliation accounts etc. and assessment orders for assessment years 2009-10 and 2010-11 in the case of assessee.
The Learned Senior DR on the other hand submitted that the Learned CIT(Appeals) after discussing the case of the assessee and the action of the Assessing Officer has already given sufficient relief by restricting the addition to Rs.4,42,242 from Rs.1,86,72,334 made by the Assessing Officer under sec. 68 of the Act. The assessee thus does not deserve any further relief in absence of satisfactory explanation made towards the additions in question from the above named three creditors.