ACIT, Circle-4, Patna V. Rajeev Kumar, Patna

ITA 116/PAT/2017

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 8709 (ITAT-PATNA)
• Duration Of Justice: 4 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 01-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 68; 143(3); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PATNA ‘DB’ BENCH AT KOLKATA [Virtual Court] Before SRI MANISH BORAD, ACCOUNTANT MEMBER & SRI SONJOY SARMA, JUDICIAL MEMBER I.T.A. No.: 116/Pat/2017 Assessment Year: 2013-14 ACIT, Circle-4, Patna...............................................Appellant Vs. Rajeev Kumar.......................................................Respondent [PAN: AHDPK 4688 G] Appearances by: Sh. Rupesh Agrawal, Sr. D/R, appeared on behalf of the Revenue. Sh. A.K. Rastogi, Sr. Adv. & Sh. Rakesh Kumar, Adv., appeared on behalf of the Assessee. Date of concluding the hearing : April 7 th , 2022 Date of pronouncing the order : June 10 th , 2022 ORDER Per Manish Borad, Accountant Member: This appeal filed by the Revenue pertaining to the Assessment Year (in short “AY”) 2013-14 is directed against the order of ld. Commissioner of Income-tax (Appeals)-2, Patna [in short ld. “CIT(A)”] dated 23.05.2017 which is arising out of the assessment order framed u/s 143(3) of the Income Tax Act, 1961 (in short the “Act”) dated 08.03.2016. I.T.A. No.: 116/Pat/2017 Assessment Year: 2013-14 Rajeev Kumar. Page 2 of 5 2. The Revenue is in appeal before the Tribunal raising the following grounds: “1. The Ld. CIT(A)-2, Patna has erred deleting the additions of Rs. 5,25,07,728/- made by AO on account of Sundry Creditors. 2. Any other ground taken at the time of hearing.” 3. Brief facts of the case as culled out from the record are that the assessee is an individual engaged in the business of civil contract. Income of Rs. 1,49,61,640/- declared in the return of income filed on 03.08.2013 for AY 2012-13. Case selected for scrutiny followed by serving of notice u/s 143(2) of the Act. After considering the submissions, ld. Assessing Officer (in short ld. “AO”) assessed the income at Rs. 6,83,61,220/- after making various additions including the addition of Rs. 5,25,07,728.86 u/s 68 of the Act for the sundry creditors and liabilities as the assessee did not discharge his duty to prove the genuineness of the claim of sundry creditors. 4. Aggrieved, the assessee preferred appeal before the ld. CIT(A). Various fresh evidences were filed by the assessee before the ld. CIT(A). Remand report was called for from the ld. AO and the same was duly submitted on 21.04.2017. Based on the remand report, ld. CIT(A) partly allowed the assessee’s appeal. So far as the addition of Rs. 5,25,07,728/- is concerned the same was deleted as in the remand report ld. AO was satisfied with the genuineness of such sundry creditors. 5. Aggrieved, the Revenue is in appeal before this Tribunal solely raising the issue that ld. CIT(A) erred in deleting the addition of Rs. I.T.A. No.: 116/Pat/2017 Assessment Year: 2013-14 Rajeev Kumar. Page 3 of 5 5,25,07,728/- made by the ld. AO on account of unexplained sundry creditors. 6. Ld. D/R vehemently argued supporting the order of the ld. AO but could not rebut the fact that that the ld. AO in the remand proceedings has accepted the correctness of the claim of sundry creditors shown in the audited financial statements. 7. Per contra, ld. Counsel for the assessee vehemently argued supporting the order of the ld. CIT(A) as well as the facts noted by the ld. AO in the remand report. 8. We have heard rival contentions and perused the records placed before us. Revenue’s sole grievance is that ld. CIT(A) erred in deleting the addition made u/s 68 of the Act at Rs. 5,25,07,728/- made on account of unexplained sundry creditors. 9. We note that during the course of assessment proceedings sufficient details were not filed by the assessee due to which ld. AO made the addition u/s 68 of the Act for sundry creditors of Rs. 5,25,07,728/-. Before the first appellate authority various documents were filed. Ld. CIT(A) called for remand report. Ld. AO during the course of assessment proceedings issued notices u/s 133(6) of the Act to all the sundry creditors to verify the genuineness. In response, confirmations were received from all the sundry creditors through post wherein they confirmed the closing balance as on 31.03.2013 standing against their names in the books of the assessee and ledger account of these parties were also filed. Ld. AO accordingly observed in the remand report that I.T.A. No.: 116/Pat/2017 Assessment Year: 2013-14 Rajeev Kumar. Page 4 of 5 genuineness of the sundry creditors of Rs. 5,25,07,728/- has been verified and found to be correct. We, further, note that ld. CIT(A) after considering the remand report deleted the impugned addition as follows: “Ground Nos. 6 to 9 are regarding the addition of sundry creditors u/s 68 of the act on account of the appellant’s failure to produce list of sundry creditors along with details and bills and vouchers for expenses. It has been observed by the AO that the sundry liability amounting to Rs.5,25,07,728/- have remain unverified despite opportunity to the appellant to prove the genuineness of the creditors. A remand report was called for in this case which has been received through Range Head wherein the AO has reported that notices u/s 133(6) of Income Tax Act where issued to all the sundry creditors to verify their genuineness. It has further been reported by the AO that confirmation were received from all the creditors through post wherein they have confirmed the balances as on 31.03.2013 standing against their name in the books of the assessee and have also submitted ledger of the assessee in their books and accordingly the AO has affirmed that upon verification the sundry creditor amounting to Rs.5,25,07,728/- have been found to be in order. In view of categorical finding contained in the remand report which has been received through Range Head, the addition of Rs.5,25,07,728/- made by the AO is hereby deleted.” 10. Therefore, under the given facts and circumstances of the case and after considering the observations of the ld. AO in the remand report, replies received from all the sundry creditors u/s 133(6) of the Act and detailed finding of the ld. CIT(A), we are of the considered view that since the assessee has succeeded in proving the genuineness of the sundry creditors of Rs. 5,25,07,728/- appearing in the audited financial statement on the closing date of the year under appeal, therefore, no interference is called for in the finding of the ld. CIT(A) deleting the said I.T.A. No.: 116/Pat/2017 Assessment Year: 2013-14 Rajeev Kumar. Page 5 of 5 disallowance made u/s 68 of the Act. Thus, the sole ground raised by the Revenue is dismissed. 11. In the result, the appeal of the Revenue is dismissed. Kolkata, the 10 th June, 2022. Sd/- Sd/- [Sonjoy Sarma] [Manish Borad] Judicial Member Accountant Member Dated: 10.06.2022 Bidhan (P.S.) Copy of the order forwarded to: 1. ACIT, Circle-4, Patna. 2. Rajeev Kumar, K-125, P.C. Colony, Hanuman Nagar, Patna. 3. CIT(A)- 2, Patna. 4. CIT- 5. CIT(DR), Patna Bench, Patna. True copy By order Assistant Registrar ITAT, Kolkata Benches Kolkata