M/S. KAMLESH DAL MILL,HARDA vs. ITO-2, HARDA, HARDA

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:

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:

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

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

Resultantly, this appeal of assessee is allowed.