ACIT CIRCLE-I, FARIDABAD, FARIDABAD vs. KALI CHARAN SHARMA, NEW DELHI

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ITA 2089/DEL/2019Status: DisposedITAT Delhi23 August 2023AY 2014-15Bench: SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, SHRI KUL BHARAT (Judicial Member)5 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s deletion of the addition. A remand report from the Assessing Officer confirmed the genuineness of the transactions and the creditors, as payments were cleared in a subsequent year.

What were the facts?

The Assessing Officer made an addition of Rs. 3,17,20,368/- for non-genuine sundry creditors. The assessee contended that there were duplicate entries and opening balances, which cannot be income. The CIT(A) deleted the addition after reviewing documentary evidence and noting that corresponding sales were accepted.

What were the issues?

Whether the addition made by the Assessing Officer for non-genuine sundry creditors was justified, considering the evidence provided by the assessee and the subsequent findings in the remand report.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI ‘C’ BENCH,

Before: SHRI N.K. BILLAIYA, & SHRI KUL BHARAT

For Appellant: Shri Lokesh Gupta, CA
For Respondent: Shri R.K. Jain, Sr. DR
Hearing: 23.08.2023Pronounced: 23.08.2023

PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-

1.

This appeal by the Revenue is preferred against the order of the ld. CIT(A) -10 New Delhi dated 10.12.2018 pertaining to Assessment Year 2014-15.

2.

The sum and substance of the grievance of the Revenue is that the ld. CIT(A) erred in deleting the addition of Rs. 3,17,20,368/- being non- genuine sundry creditors.

3.

Briefly stated, the facts of the case are that during the course of scrutiny assessment proceedings, the assessee was asked to furnish evidences in respect of 11 creditors, who, in the opinion of the Assessing Officer, appeared to be non-genuine.

4.

On receiving no plausible reply alongwith any documentary evidences, the Assessing Officer made addition of Rs. 3,17,20,368/-.

5.

When the matter was agitated before the ld. CIT(A), it was explained that there were duplicate entries, which resulted into double addition. It was further explained that in most of the creditors, there were opening balances and opening balances cannot become income of the assessee for the year under consideration.

6.

In so far as the evidences are concerned, the assessee filed documentary evidences to prove to prove the genuineness of the creditors. On perusal of the documentary evidences, the ld. CIT(A) was of the opinion that since the corresponding sales have been accepted, genuineness of the creditors cannot be doubted with and deleted the addition.

7.

When the appeal came up for hearing before this Bench on 04.08.2022, this Bench asked the ld. DR to call for remand report from the Assessing Officer. Today, the ld. DR submitted the report of the Assessing Officer dated 09.09.2022. A perusal of the same shows that the Assessing Officer concluded as under:

“It is observed that the transactions are proved to be genuine and the assessee has already cleared the payment of creditors in the subsequent year F.Y. 2016- 17. Therefore, the credit worthiness of the sundry creditors is proved to be genuine.”

8.

Since in the remand report the Assessing Officer has accepted the genuineness of the creditors, we do not find any reason to interfere with the findings of the ld. CIT(A).

9.

In the result, the appeal of the Revenue in is dismissed.

The order is pronounced in the open court on 23.08.2023.

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