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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
आदेश / O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by appeal-order dated 11.05.2023 passed by learned Commissioner of Income-Tax (Appeals), NFAC, Delhi, [“Ld. CIT(A)”], which in turn arises out of assessment-order dated 19.12.2016 passed by learned ITO-2, Harda, [“Ld. AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2014-15, the assessee has filed this appeal on following grounds:
“1. That the learned appellate authority has erred in confirming the order passed by the learned assessing authority for making addition of Rs. 3,23,279/- in the total income by treating the same as deposit out of undisclosed sources u/s 68 of the Income-tax Act, 1961, which is Page 1 of 5
Kamlesh Dal Mill, Harda vs. ITO-2, Harda Assessment year 2014-15 neither correct nor justified and the addition made in the total income is liable to be deleted.” 2. Heard the learned Representatives of both sides and case-records perused.
Brief facts leading to present appeal are such that the assessee-firm, engaged in the whole-sale business of grains, filed return declaring a total income of Rs. 4,10,000/-. The case was selected under scrutiny and statutory notices u/s 143(2)/142(1) were issued from time to time which were duly complied by assessee. Ultimately, while completing assessment, the AO made one of the additions of Rs. 3,23,279/- u/s 68 on account of unexplained sundry creditors. The assessee contested in first-appeal but could not get any relief qua this addition. Now, the assessee has come in next appeal before us.
The sole controversy between assessee and revenue is qua the addition of Rs. 3,23,279/- made by AO u/s 68.
Ld. AR for assessee carried us to Page No. 3-5 of assessment-order and submitted that the AO has noted the details of following sundry creditors, taken by him from Schedule-C annexed to the audited Balance- Sheet of assessee, whose total amount of Rs. 3,23,279/- was outstanding as on last day of the previous year:
Kamlesh Dal Mill, Harda vs. ITO-2, Harda Assessment year 2014-15 1 Shri Monu 60,178 2 Rajendra 72,760 3 Motilal 78,514 4 Bhawani 60,189 5 Radhegovind 51,638 Total 3,23,279 The AO has further noted that the assessee did not file any documentary evidence in support of these creditors; therefore he made addition.
Then, Ld. AR carried us to Para No. 6 of the order of CIT(A) and pointed out that during first-appeal the assessee submitted that those sundry creditors were in the nature of trade creditors. They were farmers from whom the assessee purchased Soyabeen through Krishi Upaj Mandi, the certificate issued by Mandi Samiti was submitted wherein the details of crop sold by those farmers to assessee were certified by Inspector of Mandi Samiti. The copies of Khasra douments of those farmers were also filed which showed that they owned lands which were irrigated. Copies of these documents are also filed at Page No. 26-31 of Paper-Book. The outstanding amounts were unpaid purchase-prices only. Ld. AR submitted that the CIT(A) did not find any infirmity or perversity in the documents filed by assessee or the facts pointed out by assessee. However, the CIT(A) has denied relief, vide Para No. 6.1 of his order, for the reason that the details of payments made to those farmers subsequently were not filed. Ld. AR submitted that the payments made to farmers were very much recorded in the books of assessee and the copies of Ledger A/cs of all 5
Kamlesh Dal Mill, Harda vs. ITO-2, Harda Assessment year 2014-15 creditors/farmers, extracted from regular books of account maintained u/s 44AA, are at Page No. 32 to 33 of the Paper-Book. These ledger a/cs clearly show that the assessee has made payments to all farmers in the first week of immediate succeeding financial year. The Ledger A/cs also contain the reference of Cash-Book Page Numbers from where the payments were made.
Ld. AR submitted that the assessee’s accounts are audited year-to-year and the balances of outstanding shown in Balance-Sheet were genuine outstanding. Further, the assessee has filed all documentary evidences in the shape of Mandi Certificates, Khasra copies, Ledger A/cs to show payments and Audited Balance-Sheet. Hence, the outstanding amounts are adequately proved by documentary evidences and nothing remains to be proved further as per orders of lower-authorities. Therefore, the addition must be deleted.
Ld. DR for revenue dutifully supported the orders of lower-authorities but, however, in all fairness left the matter to the judicious consideration of Bench while acknowledging that the issue involved has a small quantum.
We have considered rival submissions of both sides and perused the orders of lower-authorities as well as documents filed in the Paper-Book. The present case involves a small controversy regarding addition of Rs. 3,23,279/- made by AO. The assessee is engaged in whole-sale business of grains and in the course of business made purchases from farmers during the period 08.03.2014 to 24.03.2014 as per Certificate issued by Inspector of Mandi Samiti, placed at Page No. 26 of Paper-Book. There is no doubt expressed by revenue qua the genuineness of purchases. In so far as payments to farmers are concerned, the copies of Ledger A/cs filed by assessee demonstrate that the payments were made in the immediate next
Kamlesh Dal Mill, Harda vs. ITO-2, Harda Assessment year 2014-15 year. The copies of Ledger A/cs are also not disputed or doubted from the side of revenue. Therefore, based on documentary evidences filed in Paper- Book by Ld. AR under a certificate in terms of ITAT Rules that all these documents were before lower-authorities, we are inclined to delete the addition made by AO. Ordered accordingly. The assessee succeeds in this appeal.
Resultantly, this appeal of assessee is allowed.
Order pronounced in the open court on 25.10.2023.