R A MASALE PRIVATE LIMITED,SANGLI V. C.I.T, SANGLI

ITA 2507/PUN/2024

AI Insights

The case involves R A Masale Private Limited, which appealed against the order of the CIT Appeal confirming an addition made by the Assessing Officer under sections 143(3) r.w.s. 144B of the Income-tax Act, 1961. The addition was initially made as an adhoc 5% of the total Sundry Creditors amounting to Rs. 57,17,055 due to the assessee's failure to provide adequate details to substantiate the creditworthiness and genuineness of these creditors. The Tribunal, after reviewing the comprehensive details and documents provided by the assessee, including financial statements and KYC details of the creditors, concluded that the addition was unjustified and reversed the decision of the lower authorities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 469584 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHISHEK MESHR AM
• Assessee Lawyers: NARENDRA JOSHI
• Keywords: Condonation of delay; Reasonable cause
• Section: 250

Judgement Text

"आयकर अपीलीय अधिकरण \"एस एम सी\" न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL \"SMC\" BENCH, PUNE BEFORE Dr. MANISH BORAD, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2507/PUN/2024 धििाारण वषा / Assessment Year: 2017-2018 R A Masale Private Limited, Tasgaon Road, Tasgaon Road, Kavathe Ekand-416307 Maharashtra PAN-AAGCR4275H Vs ITO, Ward, Sangli Appellant Respondent Assessee by : Shri Narendra Joshi Revenue by : Shri Abhishek Meshram Additional CIT Date of hearing : 10.02.2025 Date of pronouncement : 18.03.2025 आदेश/ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : This appeal at the instance of the assessee is directed against the order of Ld. CIT Appeal (NFAC) u/s 250 of the Income-tax Act, 1961 dated 05.08.2024 which is arising out of Order passed u/s.143(3) r.w.s. 144B of the Act dated 24.12.2019. 2. The instant appeal is time barred by 29 days. Application for condonation of delay alongwith affidavit of the Consultant Mr. M.V. Thanedar has been filed who stated that due to medical reasons he could not file the appeal of the assessee in time. Considering it to be a reasonable cause we condone the delay of 29 days and admit the appeal for adjudication. 3. Sole grievance of the assessee is against finding of CIT(A) confirming the addition of Rs. 2,89,853/- made by the AO as 2 ITA No.2507/PUN/2024 adhoc addition of the 5% of the total Sundry Creditors of Rs. 57,17,055/- Ld. counsel for the assessee vehemently argued and furnished in the report before the Ld. CIT(A) running into 168 pages to explain the genuineness and creditworthiness of the sundry creditors at the close of the Financial Year 2016-17. 4. On the other hand Ld. DR supported orders of both the lower authorities. 5. We have heard the rival contentions and perused the record placed before us. The assessee is a Private Limited Company engaged in business of manufacturing of spices and income of Rs. 17,59,420/- declared in the e-return for A.Y. 2017-18 furnished on 31.10.2017. So far as the issue raised in this appeal is concerned, Ld. AO asked the assessee to explain the dedication/creditworthiness and genuineness of Sundry Creditors amounting to Rs. 57,17,055/-. Since the assessee failed to file the requisite details Ld. AO made an adhoc addition of 5% of the outstanding Sundry Creditors making addition of Rs. 2,53,383/- Though the assessee challenged this addition before the Ld. CIT(A) and it was claimed that details were filed Ld. CIT(A) but did not took cognizance and affirmed action of the Assessing Officer (AO). 6. Before us the assessee has furnished complete details of summary of Sundry Creditors, Financial Statements, Profit and Loss A/c, list of top ten sundry creditors with KYC details, ledger extract of Top ten sundry creditors, copy of Purchase Bills and Bank Statements highlighting payment to the creditors. Ideally the matter needs to be restored to the file of the Ld. Assessing Officer, but Considering the smallness of the issue and also observing that the assessee is having a turnover 3 ITA No.2507/PUN/2024 of approx. 16.24 crores and also against purchase of 14.2 crores outstanding sundry creditors at the year end are only Rs. 57,17,055/-, we deem it proper to examine the facts of the case at our end. 7. We have gone through the audited financial statements, list of Sundry Credits placed at page No. 65-69 and the same contains names of around 46 creditors and mostly they are new parties. We have also gone through the details of top 10 sundry creditors mentioned at page No. 70 which contains their addresses and PAN and also KYC details. Going through all these details we are satisfied with the explanation given by the assessee for the genuineness of sundry creditors as assessee has successfully explained the nature and source of alleged creditors of Rs. 57,17,055/- Under these given facts we are of the view that Ld. AO erred in making adhoc addition of Rs. 2,85,853/- without rejecting the Book results. The findings of Ld. CIT(A) is reversed and impugned addition is deleted. Effective ground No. 1 raised by the assessee is allowed. Ground No. 2 needs no adjudication. 8. In the result, appeal of the assessee is allowed. Order pronounced on this day of 18th March, 2025. Sd/- Sd/- (ASTHA CHANDRA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/ Pune; दििांक / Dated: 18th March, 2025. Neeta आिेश की प्रधिधलधप अग्रेधषि / Copy of the Order forwarded to: 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4 ITA No.2507/PUN/2024 4. धवभागीय प्रधिधिधि, आयकर अपीलीय अधिकरण, \"SMC\" बेंच, पुणे / DR, ITAT, \"SMC\" Bench, Pune. 5. गार्ा फाइल / Guard File. आिेशािुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण, पुणे / ITAT, Pune. "