SHREE RADHEY KRUPA CONCAST (INDIA)PVT.LTD,ANANTAPUR vs. DY.CIT-6, KANPUR

Briefly stated the facts culled out of case records are that; 2.1 The return of income filed by the assessee company declaring total loss of ₹3,18,64,571/- was first summarily processed u/s 143(1) of the Act and ITAT-Lucknow Page 1 of 4

Still aggrieved the assessee came before us in present appeal on four grounds alleging solely against the solitary addition made in its case as such addition is contrary to the provisions of section 68 of the Act and unwarranted in view of the jurisdictional high court decision in ‘Jazsons Vs CIT’[2017, 88 Taxmann.com 617 (All)].

Appearing for the appellant the Ld. Senior AR Mr Garg has reiterated appellants all contentions & arguments as raised & placed respectively before both the tax authorities below and prayed for allowing the appeal. Au contraire the Ld. DR Mr Sharma submitted that in-spite multiple opportunities at both assessments as well at first appellate stage the assessee failed to establish the genuineness of sundry creditors with cogent evidence, and assessee is no different in the present proceedings too. Therefore, the addition made u/s 41(1) of the Act calls no disruption.

We have heard the rival parties on the sole & substantive ground of addition made u/s 41(1) of the Act and subject to rule 18 of the ITAT-Rules, 1963 perused the material placed on records and considered the facts in the light of settled legal position.

We note that there is no dispute that the assessee had business transaction with three identified creditors viz; (a) Chatwal Cargo (b) Ganesh Roadlines & (c) Tirumala Roadlines etc. The balances payable to these creditors however remained to be proved on records with cogent evidence in the form of letter of confirmation and copies of ledger accounts etc., owning to which the Ld. AO held them as no more payable and therefore added as income u/s 41(1) of the Act treated it to be remission of liabilities. In the absence of concreate evidence suggesting even remotely that the liability to pay to these identified creditors is still alive, the Ld. CIT(A) sustained the addition made by the Ld. AO.

The present solitary issue in our considered view can put to rest utterly on the basis two evidences viz; (1) letter of confirmation from parties and (2) copies of ledger accounts in the book respective parties.

In view of the facts and circumstance of appellant inability to produce the former documents before the tax authorities below which resulted into addition u/s 41(1) of the Act, we deem it fit to accord one more opportunity to the appellant to produce them before the Ld. CIT(A) who shall verify & vouch the same in remand and decide this limited issue on merits in accordance with law. ergo order accordingly. Needless to state that, the assessee shall be given preferably three effective opportunities of hearing to produce the former documents in support of its claim.

In result the appeal of the assessee is ALLOWED FOR STATISTICAL PURPOSES in above terms. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Wednesday, 26th day of June, 2024