M/S RAJA BADA,DURG vs. INCOME TAX OFFICER-1(3), BHILAI, DURG

आदेश / O R D E R

PER ARUN KHODPIA, ACCOUNTANT MEMBER:

1. In the facts of case, Ld. CIT(A) erred in confirming addition of Rs.45,00,000/- made by AO on account alleged bogus liability in the form of Sundry Creditors resulting due to the difference in the outstanding balance in the books of appellant and creditor. The addition made by AO and sustained by Ld. CIT(A) is illegal and not justified. - Rs.13,90,500/- 2. The appellant reserves the right to add, amend or modify any of the ground/s of appeal. - Nil

2 :: 3. The brief facts of the case are that the assessee is a partnership firm, had filed its return of income for the AY 2015-16 on 31.03.2016 declaring total income of Rs.9,08,330/-. The case of the assessee was selected for limited scrutiny. Statutory notices were issued in due course. The Ld.AR of the assessee has filed power of attorney. However, the assessee was not represented before the AO, at several occasions. Therefore, it was assumed by the AO that the assessee has nothing to say in the matter. However, a final opportunity vide letter dated 01.12.2017 intimating proposed additions were sent to the assessee. In response to the same, the Counsel of the assessee along with brother of the partner of the firm have attended the Office of the ld.AO and filed the submissions to the queries raised. On perusal of such queries, the AO has observed that an amount of Rs.9,39,30,223/- has been shown under the head ‘sundry creditors’. The details of which were called for. The assessee submitted the details and on verification of those details, it was revealed that against M/s. Amar Infrastructure Ltd., the assessee has shown a liability of Rs.6,01,48,387/-. However, when the same was verified with the accounts of M/s.Amar Infrastructure Ltd. from the Office of the ACIT-1(1), Bhilai, as the assessment proceedings in the case of M/s. Amar Infrastructure Ltd., was pending with the ACIT-1(1), Bhilai, the corresponding entry was found to be for Rs.5,56,48,387/-. The assessee confronted with the above difference, for which, the assessee has submitted that the entry of difference of Rs.45 lakhs was by mistake shown in the ledger account of 3 :: M/s.Manohar Deal Com Pvt. Ltd., and due to clerical mistake, this difference has occurred. The submissions of the assessee were not accepted by the AO for the reasons that no such excess amount was noticed in the account of M/s.Manohar Deal Com Pvt. Ltd. on verification of the same in the audited accounts of the assessee’s firm. Finally, addition of Rs.45,00,000/- on account of bogus liability was made in the return of income of the assessee. Aggrieved by the decision of the AO, the assessee preferred an appeal before the Ld.CIT(A), NFAC. However, as observed by the Ld.CIT(A), the assessee did not avail any of the opportunity provided by various hearing notices. Therefore, appeal filed by the assessee was decided on merits, based on material available on record by accepting the observation of the AO in absence of any further explanation rendered by the assessee and the appeal filed by the assessee was dismissed.

4 :: made, ample opportunities were granted to the assessee by the AO as well as the Ld.CIT(A). However, in absence of any plausible explanation, the assessee is squarely failed to substantiate that the addition made was bad in law. In such circumstances, it was a prayer that the order of the Ld.CIT(A) should be sustained.