Smt. Neelam Saggar, Ludhiana V. DCIT, Ludhiana

CO 20/CHANDI/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7635 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-08-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 18-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Assessee Lawyers: S R CHHABRA
• Keywords: Proportionate interest; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI H.L. KARWA, VP AND SHRI T.R. SOOD, AM ITA NO. 544/CHD/2012 ASSESSMENT YEAR: 2008-09 D.C.I.T. C-II, LUDHIANA V SMT. NEELAM SAGGAR PROP. M/S VINAYAK ENTERPRISES H NO. 180-B, BRS NAGAR LUDHIANA AEHPS 2635 C CROSS-OBJECTIONS NO. 20/CHD/2012 ARISING OUT OF ITA NO . 544/CHD/2012 ASSESSMENT YEAR: 2008-09 SMT. NEELAM SAGAR V D.C.I.T. C-II, LUDHIANA PROP. M/S VINAYAK ENTERPRISES H NO. 180-B, BRS NAGAR LUDHIANA AEHPS 2635 C (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI N.K. SAINI APPELLANT BY: SHRI S.R. CHHABRA DATE OF HEARING: 22.08.201 2 DATE OF PRONOUNCEMENT: 29.08.2012 ORDER PER T.R. SOOD, A.M ITA NO. 544/CHD/2012 IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOWIN G GROUNDS: 1 THAT THE LD. CIT(A) HAS ERRED IN LAW IN DELETIN G ADDITION OF RS. 76,546/- U/S 36(1)(III) MADE BY THE ASSESSING OFFIC ER BY RELYING UPON THE JUDGMENT IN THE CASE OF M/S MUNJAL SALES CORPORATIO N REPORTED AT 298 ITR 298 (S.C) WHICH WAS DELIVERED ON THE FACTS, ALT OGETHER DIFFERENT FROM THAT OF THE ASSESSEE AND ALSO BY IGNORING THEREBY T HE RELIANCE PLACED B Y THE ASSESSING OFFICER ON THE DECISION OF HON'BLE PU NJAB & HARYANA HIGH COURT IN THE CASE OF CIT V. ABHISHEK INDUSTRIES LTD . REPORTED AT 286 ITR 1. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW IN DELETIN G ADDITION OF RS. 40,33,420/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF UNVERIFIABLE CREDITS IGNORING THE FACT THAT THE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE BEFORE THE ASSESSING OFFICER REGARDING GENUINENESS OF THE ABOVE CREDITS IN SPITE OF SUFFICIENT OPPORTUNITY HAVING BEEN AFFO RDED TO HER,. 3. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN NOT COMPLYING TO SUB RULE (2) OF RULE 46A WHILE ADMITTING THE ADD ITIONAL EVIDENCE AND IN NOT PASSING A SEPARATE ORDER IN WRITING AND THER EBY IGNORING THE DECISION OF THE JURISDICTIONAL BENCH OF THE HON'BLE ITAT, CHANDIGARH IN 2 THE CASE OF SMT. SURINDER KAUR DATED 29.7.2011 PASS ED IN ITA NO. 596/CHD/2011. 2. GROUND NO. 1 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICE D THAT THE ASSESSEE HAD GIVEN INTEREST FREE ADVANCES TO SHRI VINEET SAGGAR AND SHRI DEEPAK SAGGAR AMOUNTING TO RS. 6,37,134/-. IN RESPONSE TO THE QU ERY IT WAS STATED THAT INTEREST FREE ADVANCES WERE GIVEN BY THE ASSESSEE TO HER BOT H THE SONS. THIS WAS A FAMILY TRANSACTION, THEREFORE, NO INTEREST WAS CHA RGED. THE FAMILY MEMBERS MAY GIVE AND TAKEN INTEREST FREE LOANS AS PER MUTUA L UNDERSTANDINGS. THE ASSESSING OFFICER DID NOT ACCEPT THE SUBMISSIONS AN D REFERRED TO THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN CASE OF ABHI SHEK INDUSTRIES, 286 ITR 1 AND DISALLOWED THE PROPORTIONATE INTEREST AMTINGING TO RS. 76,456/-. 3. ON APPEAL BEFORE THE LD. CIT(A), IT WAS MAINLY S UBMITTED THAT THIS WAS A CASE OF INDIVIDUAL, THEREFORE, DECISION OF ABHISHE K INDUSTRIES (SUPRA) WAS NOT APPLICABLE. FURTHER THE MONEY WAS GIVEN OUT OF ASS ESSEES OWN CAPITAL (OPENING BALANCE) AMOUNTING TO RS. 75,39,533/-. 4. THE LD. CIT(A) DELETED THE ADDITION MAINLY ON TH E BASIS THAT THE ASSESSEE HAD SUFFICIENT CAPITAL BALANCE AND WAS IN CONSONANC E WITH THE DECISION OF HON'BLE SUPREME COURT IN CASE OF MUNJAL SALES CORPO RATION V. CIT AND ANOTHER, 298 ITR 298 (S.C). 5. BEFORE US, THE LD. DR FOR THE REVENUE SUBMITTED THAT THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN CASE OF ABHI SHEK INDUSTRIES (SUPRA) WAS SQUARELY APPLICABLE TO THE FACTS OF THE CASE. IN THAT DECISION HON'BLE HIGH COURT HAS CLEARLY OBSERVED THAT IF THERE WAS SUFFIC IENT CAPITAL THEN THERE WAS NO NEED FOR BORROWING. HE ALSO CONTENDED THAT THE DEC ISION OF HON'BLE SUPREME COURT IN CASE OF MUNJAL SALES CORPORATION V. CIT ( SUPRA) IS DISTINGUISHABLE. 6. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSES SEE REFERRED TO PAGE 16 OF THE PAPER BOOK WHICH IS A COPY OF THE CAPITAL ACCOUNT A ND POINTED OUT THAT THERE WAS OPENING CAPITAL BALANCE OF RS. 75,39,533/- AND THE CLOSING BALANCE WAS RS. 1,26,94,265/-. THIS CLEARLY SHOWS THAT THE SUFFICI ENT MONEY WAS AVAILABLE AND THE SAME WAS GIVEN BY THE ASSESSEE TO HER SONS. HE ALS O SUBMITTED THAT THE DECISION OF 3 ABHISHEK INDUSTRIES (SUPRA) IS DISTINGUISHABLE BECA USE THAT WAS THE CASE OF A COMPANY WHEREAS THE ASSESSEE IS AN INDIVIDUAL. HE ALSO REL IED ON THE FOLLOWING JUDGMENTS:- 1 JUDGMENT OF HON'BLE CALCUTTA HIGH COURT IN BRITIS H PAINS (INDIA) LTD. V. CIT, 190 ITR 196 (CAL) 2 JUDGMENT OF ITAT (DELHI) IN APPOLLO TRADE LINKS V ITO, 204 ITR 78 (AT) DELHI 3 JUDGMENT OF ITAT (HYDERABAD) IN SARVARYA TEXTILES LTD V DCIT, 54 ITD 612 4. JUDGMENT OF ITAT (AHMEDABAD) IN RAJMOTI INDUSTRIES V ITO, 52 ITD 286 5 JUDGMENT OF ITAT (BOMBAY) IN PREMIER BRASS AND ME TAL WORKS (P) LTD. V ACIT, 51 ITD 114 6 JUDGMENT OF ITAT (DELHI) IN ESCORTS LTD. V ACIT, 104 IRD 427. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY AN D ARE UNABLE TO AGREE WITH THE SUBMISSIONS OF THE LD. COUNSEL OF THE ASSE SSEE. WE FIND THAT HON'BLE JURISDICTIONAL HIGH COURT IN CASE OF ABHISHEK INDUS TRIES (SUPRA) HAS CONSIDERED VARIOUS DECISIONS OF HON'BLE HIGH COURTS AND HON'BL E SUPREME COURT AND HAS CLEARLY OBSERVED THAT THE ONUS IS ON THE ASSESSEE T O PROVE THAT INTEREST FREE ADVANCES WERE GIVEN OUT OF INTEREST FREE MONEY AVAI LABLE TO THE ASSESSEE. IT HAS ALSO BEEN OBSERVED THAT NORMALLY THE CAPITAL WO ULD BE INTRODUCED IN THE BEGINNING OF THE YEAR AND THE PRESUMPTION WOULD BE THAT THE CAPITAL HAS BEEN UTILIZED FOR SETTING UP ALL THE BUSINESS. IF THE A SSESSEE HAD INTEREST FEE FUNDS AVAILABLE THEN THERE IS NO NEED TO BORROW FURTHER F UNDS. THE HELD COLUMN OF THE DECISION READS AS UNDER:- HELD: (I) THAT THE SHARE CAPITAL IS MEANT TO BE USE D FOR PRODUCTIVE USE IN THE BUSINESS. IF THE SHARE CAPITAL, ACCORDING TO THE A SSESSEE, WAS SURPLUS AND IT COULD PART WITH THE SAME TO ITS SISTER CONCERN FOR NON-BUSINESS PURPOSE WITHOUT ANY INTEREST, THERE WAS NO NEED TO RAISE THE LOANS TO THAT EXTENT AND THE AMOUNT OF SUCH SHARE CAPITAL SHOULD HAVE BEEN UTILIZED FOR THE PROJECT ITSELF. IN CASE THE ASSESSEE HAD NOT ADVANCED LOANS TO ITS SISTER CONCE RN ON INTEREST, FREE BASIS, EVEN IF THE ALLEGED SURPLUS AMOUNT COULD NOT BE REP AID TO THE FINANCIAL INSTITUTION BEFORE THE SCHEDULED DATE AS FAR AS THE TERM LOAN WAS CONCERNED, THE INTEREST BEING PAID BY THE ASSESSEE ON THE WORKING CAPITAL COULD HAVE CERTAINLY BEEN SAVED TO THAT EXTENT. THE BORROWING OF THE FU NDS BY THE COMPANY TO THAT EXTENT WAS NOT FOR THE PURPOSE OF BUSINESS AND THER E WAS NOTHING ON RECORD TO SUGGEST THAT AMOUNTS WERE ADVANCED TO THE SISTER CO NCERNS TO ADVANCE SOME BUSINESS OBJECT. ACCORDINGLY , THE ASSESSEE WAS NO T ENTITLED TO CLAIM DEDUCTION OF THE INTEREST ON THE BORROWINGS TO THE EXTENT THO SE WERE DIVERTED TO SISTER CONCERNS OR OTHER PERSONS WITHOUT INTEREST. IN THE CASE BEFORE US NO BALANCE SHEET HAS BEEN FIL ED TO SHOW HOW THE FUNDS HAVE BEEN USED BY THE ASSESSEE. HOWEVER, IF THE ASSESSEE HAD SURPLUS FUNDS THEN THERE 4 WAS NO NEED TO BORROW AND BORROWINGS ARE DEFINITELY THERE BECAUSE THE ASSESSEE HAD SHOWN EXPENDITURE ON IT. THE DECISION RELIED ON BY THE LD. COUNSEL OF THE ASSESSEE HAVE BEEN RENDERED BY HON'BLE CALCUTTA HIGH COURT I N CASE OF BRITISH PAINTS (INDIA) LTD. V CIT (SUPRA) AND OTHER DECISIONS ARE BY THE B ENCHES OF THE TRIBUNAL. SINCE A CLEAR CUT JUDGMENT ON THE ISSUE HAS BEEN DELIVERED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN CASE OF ABHISHEK INDUSTRIES (SUPRA) THEREF ORE, THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT HAS TO BE FOLLOWED. AS F AR AS THE DECISION OF HON'BLE SUPREME COURT IN CASE OF MUNJAL SALES CORPORATION V. CIT ( SUPRA) IS CONCERNED, THE MAIN ISSUE WAS ALLOWABILITY OF INTEREST U/S 40B (IV) R.W.S. 36(1)(III) OF THE ACT, THE HON'BLE SUPREME COURT ITSELF HAS CLARIFIED IN PARA 18 AS UNDER:- BEFORE CONCLUDING, WE MAY MENTION THAT THE IMPORTA NCE OF THE JUDGMENT IS THE CLARIFICATION WHICH WE WERE REQUIRED TO GIVE IN THE CONTEXT OF DEDUCTIONS U/S 30 TO 38 TO BE READ WITH THE LIMITATION PRESCRIBED U/S 40. SINCE THERE WAS SOME CONFUSION WITH REGARD TO THE STATUS OF SECTION 40, PARTICULARLY, AFTER THE ENACTMENT OF THE FINANCE ACT, 1992, WE HAVE EXPLAIN ED THE LAW IN THE CONTEXT OF DEDUCTIONS UNDER CHAPTER IV-D OF THE 1961 1CT. WE HAVE ACCEPTED THE SUBMISSIONS ADVANCED BY THE LD ADDITIONAL SOLICITOR GENERAL IN THAT REGARD. HOWEVER, THE ASSESSEE SUCCEEDS IN THIS BATCH OF CIV IL APPEALS ON THE PECULIAR FACTS OF THIS CASE. THUS IT IS CLEAR THAT THE RATIO OF THE DECISION IS ON A DIFFERENT ASPECT OF ALLOWABILITY OF INTEREST. IN THE CIRCUMSTANCES WE SET ASIDE THE OR DER OF LD. CIT(A) AND CONFIRMED THE DISALLOWANCE OF INTEREST U/S 36(1). 8. GROUNDS NO. 2 & 3 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICE D THAT THE ASSESSEE HAS SHOWN SUNDRY CREDITORS FROM THE FOLLOWING THREE PAR TIES:- SR NO NAME OF THE ASSESSEE AMOUNT 1 M/S BANSAL WOOL TRADERS RS. 38,93,233/- 2 M/S S.K. TRADING COMPANY RS. 50,187/- 3 M/S UNIVERSAL WOOLEN MILLS RS. 90,000/- TOTAL RS. 40,33,420/- DESPITE VARIOUS OPPORTUNITIES THE ASSESSEE COULD NO T FILE ANY CONFIRMATION FROM THE PARTIES AND THEREFORE, THIS AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE. 5 9. BEFORE THE LD. CIT(A) IT WAS STATED THAT THE ASS ESSEE HAD SHOWN SUNDRY CREDITORS AMOUNTING TO RS. 1,63,47,555/- FROM 12 PA RTIES IN ADDITION TO SOME UNSECURED AND SECURED LOANS. THE ASSESSEE COULD FIL E CONFIRMATION FROM 9 PARTIES BEFORE THE ASSESSING OFFICER AND ASSESSEE W AS CONFRONTED ONLY ON 23.12.10 AND THEREFORE, THE SAME COULD NOT BE FILE D BEFORE THE ASSESSING OFFICER. FURTHER CONFIRMATION IN RESPECT OF M/S BA NSAL WOOL TRADERS AND M/S UNIVERSAL WOOLEN MILLS WAS ALSO FILED WITH THE APPE LLATE AUTHORITY. 10. THE LD. CIT(A) WAS OF THE VIEW THAT FILING OF T HESE TWO ADDITIONAL CONFIRMATIONS AMOUNTED TO ADDITIONAL EVIDENCE AND T HEREFORE, THE SAME WAS SENT FOR THE COMMENTS OF THE ASSESSING OFFICER. IN RESPONSE THE ASSESSING OFFICER STATED VIDE LETTER DATED 22.2.12 AS UNDER:- THE SECOND ISSUE RAISED BY THE LD. AR FOR THE ASSE SSEE IS REGARDING THE ADDITION OF RS. 40,33,420/- ON ACCOUNT OF UNCONFIR MED/UNVERIFIABLE LIABILITIES, OUT OF TOTAL LIABILITIES SHOWN UNDER T HE HEAD SUNDRY CREDITORS AT RS. 1,63,47,555/-. IN THIS REGARD, DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, ON 6.12.2010, THE LD. AR FOR THE ASSES SEE WAS ASKED TO PRODUCE THE CONFIRMATIONS OF THE SUNDRY CREDITORS A ND THE CASE WAS ADJOURNED TO 13.12.2010. ON 13.12.2010 THE LD. AR FOR THE ASSESSEE SUBMITTED PART REPLY AND PROMISED TO FILE THE REMAI NING REPLY/EVIDENCES BY 16.12.2010. ON 16.12.2010 ON EVIDENCE/CONFIRMAT ION WAS FILED BY THE ASSESSEE WITH RESPECT TO THE ABOVE 3 CREDITORS I.E. M/S BANSAL WOOL TRADERS (RS. 38,93,233/-) M/S S.K. TRADING COMPANY (RS. 50,187/-) AND M/S UNIVERSAL WOOLEN MILLS (RS. 90,000/-). IT IS P ERTINENT TO MENTION HERE THAT EVEN AS ON TODAY NO EVIDENCE, REGARDING GENUIN ENESS OF THE LIABILITY SHOWN IN THE NAME OF M/S S.K. TRADING COMPANY AT RS . 50,188/- HAS BEEN FILED. THIS POINT TOWARDS THE BOGUS NATURE OF LIABILITIES SHOWN BY THE ASSESSEE IN HER BALANCE SHEET AND THE ASSESSING OFFICER HAS RIGHTLY ADDED THE SAME TO THE INCOME OF THE ASSESSEE WHO FA ILED TO PROVE THE GENUINENESS OF THESE LIABILITIES IN SPITE OF REASON ABLE OPPORTUNITY HAVING BEEN AFFORDED TO HER. HENCE, THE ADDITION MADE BY EH ASSESSING OFFICER ON ACCOUNT OF UNCONFIRMED LIABILITIES AT RS. 40,33, 420/- MAY BE CONFIRMED AND APPEAL OF THE ASSESSEE ON THIS ISSUE MAY BE DIS MISSED. 11. IN THE REJOINDER OF THE ABOVE REPLY IT WAS CONT ENDED THAT THE ASSESSEE HAD ALREADY FILED TWO CONFIRMATIONS WHICH HAS BEEN OBJECTED. IF THE CONFIRMATIONS ARE FILED FOR 11 PARTIES OUT OF 12 TH EN IT CANNOT BE SAID THAT THESE ARE BOGUS CONFIRMATIONS. 12. THE LD. CIT(A) RESTRICTED THE ADDITION ON ACCOU NT OF SUNDRY CREDITORS TO RS. 50,188/- VIDE PARAS 8 AND 9:- 8 I HAVE CONSIDERED THE BASIS OF ADDITION MADE BY THE ASSESSING OFFICER, THE ARGUMENTS OF THE A.R ON THE ISSUE AND COMMENTS OF THE ASSESSING OFFICER DURING REMAND PROCEEDINGS. FIRST OF ALL THE A.O IN THE ASSESSMENT ORDER HAS EQUATED THE TRADE CREDITORS WI TH CASH CREDITORS SO 6 AS TO PRESUME THAT THE PROVISIONS OF SECTION 68 WER E APPLICABLE ON THE SAME. I DONT AGREE WITH THIS VIEW OF THE ASSESSIN G OFFICER AS THE TRADE CREDITORS HAPPEN TO BE A CONSEQUENCE OF PURCHASES M ADE BY THE APPELLANT WHICH HAVE BEEN VERIFIED BY THE ASSESSING OFFICER AND NO ADVERSE COMMENTS ON THE SAME HAS BEEN RECORDED IN T HE ASSESSMENT ORDER. THE BOOK RESULTS OF THE APPELLANT HAVE BEEN ACCEPTED AND IN THE CIRCUMSTANCES IF THE ASSESSING OFFICER HAD ANY DOUB TS ABOUT THE GENUINENESS OF ANY OF THE PURCHASES AND CONSEQUENTL Y OF THE TRADE CREDITORS, THE LOGICAL STEP SHOULD HAVE BEEN TO VER IFY THE TRANSACTIONS BY INDEPENDENT INVESTIGATION THROUGH EXERCISE OF AUTHO RITY AVAILABLE UNDER THE INCOME TAX ACT. THE ACTION OF THE ASSESSING OF FICER IN PLACING THE ENTIRE ONUS ON THE ASSESSEE TO PROCURE THE CONFIRMA TIONS IS ERRONEOUS. THE ASSESSING OFFICER WAS IN POSSESSION OF COMPLETE ADDRESS DETAILS OF THE TRADE CREDITOR SO AND THEREFORE, WITHOUT CARRYI NG OUT NECESSARY INVESTIGATION, THE PRESUMPTION THAT THESE LIABILITI ES HAD CEASED TO EXIST IS QUITE PREMATURE. THEREFORE, THE BASIC PREMISE OF THE ASSESSING OFFICER IN TREATING THE TRADE CREDITORS AS CASH CREDITORS A S SAME HAS LED TO THE ERRONEOUS CONCLUSION THAT THE ASSESSEE WAS LEGALLY BOUND TO PROVE THE IDENTITY, CREDITOR WORTHINESS AND GENUINENESS OF TH E TRANSACTION. 9. IT IS SEEN THAT THE APPELLANT HAD FILED NUMBER O F CONFIRMATIONS REGARDING THE TRADE CREDITORS BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS BUT CONFIRMATIONS WITH REGAR D TO THREE CREDITORS COULD NOT BE FILED BECAUSE OF FACTORS LIKE PAUCITY OF TIME ETC. IT IS APPARENT THAT SUFFICIENT TIME WAS NOT AVAILABLE WIT H THE ASSESSEE TO COMPLY WITH THE ASSESSING OFFICERS DIRECTION WITH THIS REGARD. THEREFORE, THE FILING OF ADDITIONAL EVIDENCE DURING THE APPELL ANT PROCEEDINGS IS PERMITTED UNDER RULE 46A. THE APPELLANT HAS FILED CONFIRMATION IN RESPECT OF TWO PARTIES OUT OF THREE NAMELY M/S BAN SAL WOOL TRADERS (RS. 38,93,233/-) AND M/S UNIVERSAL WOOLEN MILLS (RS. 90 ,000/-) AND THE ASSESSING OFFICER DURING THE REMAND PROCEEDINGS HAS NOT BROUGHT ON RECORD ANY THING OBJECTIONABLE TO SUGGEST THAT THE LIABILITY IN QUESTION DID NOT EXIST. FURTHER REGARDING ONE TRADE CREDITOR I. E. M/S S.K. TRADING COMPANY (RS. 50,188/-) CONFIRMATION COULD NOT BE FI LED BUT THE LIABILITY STANDS IN THE BOOKS OF ACCOUNTS OF THE APPELLANT. IT IS APPARENT THAT DESPITE SUFFICIENT TIME AVAILABLE WITH THE APPELLAN T THE CONFIRMATION OF CREDIT OUTSTANDING TOWARDS M/S S.K. TRADING COMPANY HAS NOT BEEN CONFIRMED AND NO REASON FOR THE SAME HAS BEEN GIVEN . THE APPELLANT HAD MORE THAN A YEARS TIME TO GET HOLD OF THE CREDI T CONCERNED SO AS TO GET THE CONFIRMATION BUT FAILURE IN THIS REGARD HAS MADE IT OBVIOUS THAT EITHER THIS LIABILITY HAS CEASED EXIST OR THE ASSES SEE IS RELUCTANT TO PAY FOR ANY REASON KNOWN TO HIM. SINCE NO REASON HAS BEEN GIVEN FOR NON FILING OF CONFIRMATION DESPITE MORE THAN SUFFICIENT TIME G RANTED IN THIS REGARD, THE ONLY IN ESCAPABLE CONCLUSION IS THAT THE LIABIL ITY IN QUESTION DOES NOT EXIST ANY MORE. IN THE CIRCUMSTANCES THE ADDITION MADE BY THE ASSESSING OFFICER WITH RESPECT TO AN AMOUNT OF RS. 50,188/- IS CONFIRMED. 13. BEFORE US, THE LD. DR FOR THE REVENUE SUBMITTED THAT THE LD. CIT(A) HAD WRONGLY ADMITTED THE ADDITIONAL EVIDENCE IN VIOLATI ON OF RULE 46A. IT IS WRONG ON HIS PART TO STATE THAT SUFFICIENT TIME WAS NOT G IVEN TO THE ASSESSING OFFICER. HE REFERRED TO PAGE 1 & 2 OF THE ASSESSMENT ORDER A ND POINTED OUT THAT FIRST NOTICE U/S 143(2) WAS GIVEN ON 7.9.2009 AND FIRST Q UESTIONNAIRE WAS SERVED ON ASSESSEE ON 29.3.2010 WHICH MEANS SUFFICIENT TIME W AS GIVEN TO THE ASSESSEE. 7 THEREFORE, IN THESE CIRCUMSTANCES THE LD. CIT(A) S HOULD NOT HAVE ADMITTED THE ADDITIONAL EVIDENCE IN THE FORM OF TWO CONFIRMATION S. 14. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSES SEE SUBMITTED THAT ORIGINALLY THE ASSESSING OFFICER HAD ASKED FOR CONF IRMATIONS OF SECURED LOANS AND THE QUERY REGARDING SUNDRY CREDITORS WAS RAISED FOR THE FIRST TIME ONLY ON 16.12.2010 AND THE ASSESSMENT ORDER WAS PASSED ON 2 3.12.2010. THEREFORE, SUFFICIENT TIME WAS NOT AVAILABLE. HE ALSO CONTEN DED THAT THE ASSESSING OFFICER HAS ACCEPTED PURCHASES AND THEREFORE, SUNDRY CREDIT ORS COULD NOT HAVE BEEN ADDED U/S 68 OF THE ACT. FURTHER THE ASSESSEE HAD SUNDRY CREDITORS FROM 12 PARTIES OUT OF WHICH CONFIRMATIONS FROM 9 PARTIES W ERE FILED BEFORE THE ASSESSING OFFICER AND THE CONFIRMATION FROM TWO PAR TIES WAS FILED BEFORE THE LD. CIT(A). MERE NON-CONFIRMATION BEING NOT AVAILABLE FROM ONE PARTY CAN NOT REACH TO THE CONCLUSION THAT CREDIT FROM SUCH PARTI ES WAS NOT BOGUS. 15. WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY A ND FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL OF THE ASSESSEE. TH E REVENUE HAS NOT FILED COPY OF QUESTIONNAIRE SHOWING THAT ORIGINAL QUERY R EGARDING SUNDRY CREDITORS WAS RAISED FOR THE FIRST TIME ON 29.3.2010. IN ANY CASE, CLAUSE (B) OF RULE 46A READS AS UNDER: 46A(B) WHERE THE APPELLANT WAS PREVENTED BY SUFFI CIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE [ASSESSING OFFICER] THE ABOVE RULE CLEARLY PROVIDES THAT WHEREVER THERE IS SUFFICIENT CAUSE FOR NOT PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE, THE COMMISSIONER (APPEALS) HAS THE POWER TO ADMIT THE S AME AND THIS IS DISCRETIONARY POWER AND ONLY FETTER WHICH COULD BE READ AS THAT THIS POWER SHOULD BE USED JUDICIOUSLY. THE QUERY REGARDING SU NDRY CREDITORS WAS RAISED BY THE ASSESSING OFFICER ON 16.12.2010, THEREAFTER CLE ARLY SUFFICIENT TIME WAS NOT THERE TO FILE THE CONFIRMATION. THE POWER HAS BEEN EXERCISED JUDICIOUSLY BECAUSE THE LD. CIT(A) HAS CONFRONTED THE ASSESSING OFFICER WITH THE CONFIRMATION WHICH WERE FILED BEFORE HIM. THEREFOR E, WE FIND NOTHING WRONG 8 WITH THE ORDER OF LD. CIT(A) AND CONFIRM THE DELETI ON OF ADDITION ON ACCOUNT OF SUNDRY CREDITORS EXCEPT FOR ONE CREDIT IN CASE OF M /S S.K. TRADING COMPANY AMOUNTING TO RS. 50,188/-. 16. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED. CROSS-OBJECTIONS NO. 20/CHD/2012 17 THROUGH THIS CROSS-OBJECTIONS THE ASSESSEE HAS O BJECTED TO THE CONFIRMATION OF ADDITION IN RESPECT OF M/S S.K. TR ADING COMPANY AMOUNTING TO RS. 50,188/- U/S 68 OF THE ACT. BOTH THE PARTIES M ADE SIMILAR ARGUMENTS AS WERE MADE IN RESPECT OF GROUNDS NO. 2 & 3 OF REVEN UES APPEAL. 18 AFTER HEARING BOTH THE PARTIES WE FIND THAT SECT ION 68 OF THE ACT WOULD COVER ANY AMOUNT WHETHER THE SAME IS ON ACCOUNT OF LOAN OR ADVANCE OR EVEN THE PURCHASE BECAUSE SECTION 68 USES THE EXPRESSION WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS_________________. THUS IT I S CLEAR THAT EVEN CREDIT PURCHASES WOULD BE COVERED U/S 68 OF THE ACT. WE F URTHER FIND THAT THE ASSESSING OFFICER HAD ALREADY DISALLOWED AMOUNTS IN RESPECT OF THREE PARTIES THEREFORE, THE ASSESSEE SHOULD HAVE TAKEN ABUNDANT MEASURES TO FILE THE CONFIRMATIONS IN RESPECT OF ALL THE THREE PARTIES BEFORE THE LD. CIT(A). IN ANY CASE ONCE THE LD. CIT(A) ALSO CONFIRMED THE ADDITIO N ON ACCOUNT OF M/S S.K. TRADING COMPANY, THE ASSESSEE SHOULD HAVE ATLEAST FILED THE COPY OF CONFIRMATION BEFORE US WHICH HAS NOT BEEN FILED. T HEREFORE, IT IS CLEAR THAT THE ASSESSEE HAS NO EVIDENCE TO PROVE THE CREDIT FROM M /S S.K. TRADING COMPANY. ACCORDINGLY WE CONFIRM THE ADDITION. THE CROSS-OBJ ECTIONS FILED BY THE ASSESSEE ARE DISMISSED. 19. IN THE RESULT, APPEAL FILED BY THE REVENUE IS P ARTLY ALLOWED AND THE CROSS- OBJECTIONS FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 29.08.2012 SD/- SD/- (H.L. KARWA) (T.R. SOOD) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 29.08.2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/ THE DR 9