Sagar Paper Box Industries, Vapi vs Department Of Income Tax

.Income-tax Officer, Vapi Ward-3, Vs M/s Sagar Paper Box Industries, Vapi. Shed No.A2/27, 40 Shed Area Silvassa Road, Vapi. (Appellant) (Respondent) PA No. AAOFS4542D

Appellant by Shri B. L. Yadav, Sr.DR Respondent by Shri Ravi Bohra, AR

Date of hearing: 14-5-2015 Date of pronouncement: 29/5/2015

ORDER

PER Shri Rajpal Yadav, Judicial Member.

Revenue is in appeal before us against the order of CIT(A) dated 30th December, 2010 for Assessment Year 2007-08. The solitary grievance of the Revenue is that ld. CIT(A) has erred in deleting the addition of Rs.23,55,565/- which was added by the AO with the aid of section 68 on account of difference in the sundry creditors available in the balance sheet of the assessee vis-à-vis the confirmation given by the creditors.

ITA No.1210/Ahd/2011 2 Asst. Year 2007-08

2. Brief facts are that assessee has filed its return of income on 06/11/2007 declaring total income of Rs.55,401/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) of the I.T. Act, 1961 was issued and served upon the assessee on 27/09/2008. On scrutiny of the accounts it revealed that sundry credits of Rs.1,73,82,361/- are shown in the accounts of the assessee. The ld. AO had directed the assessee to file confirmation on behalf of the creditors. It appears that there was a death in the family of the partners and, therefore, they could not submit the details in the given time. A request was made that AO should use his powers available under section 133(6) and directly call for confirmations from the parties. According to the information collected by the AO there is a variation in the amounts outstanding towards the assessee. The details noticed by the AO read as under :-

Sl.No. Party name Amount as per Amount as per Difference balance sheet confirmation amount letters

1. Apna Paper Mills Pvt. 344,170 375,688 31,518 Ltd.

2 Vahid Paper 280,000 730,000 450,000 Distributors

3. R.A. Shaikh Paper Mills 469,410 2,216,062 1,746,652 Ptd.

4. Vaibhav Paper Boards 1,490,199 1,362,804 127,395 Pvt. Ltd. (Total of both units) Total 2,355,565

The ld. AO in this way made an addition of Rs.23,55,565/-.

3. On appeal ld. first appellate authority has deleted the addition by observing as under :-

ITA No.1210/Ahd/2011 3

Asst. Year 2007-08

''5.4 Decision: I have carefully considered the submissions made by the ld. AR and the findings of the AO. The dispute of non-reconciliation of the creditors aroused due to the paucity of time and the untimely death of the family members of the appellant. The AO is absolutely right that bogus credit balance cannot be included in the B/S. It was the duty of the appellant to submit the reconciliation statements before the AO for his satisfaction which in this case the appellant failed to do. However, during the appellate proceedings the ld. AR submitted detail reconciliation with the ledger a/c of those parties. I have perused those details and satisfied that the reconciliation statements appears to be in order. Therefore, the AO is directed to delete the addition made in this ground. Hence, the appeal in this ground is allowed.''

4. With the assistance of the ld. representatives we have gone

through the record carefully. It emerges out that ld. CIT(A) has

deleted the addition on the ground that assessee has reconciled the

differences. For example the major difference is in the case of R.A.

Shaikh Paper Mill. As per the balance sheet a credit of Rs.4,69,410/-

was shown whereas this party has confirmed that the amount of

Rs.22,16,062/- stands outstanding towards the assessee. In

reconciliation assessee pointed out that a cheque of Rs.11,64,163/-

was issued to this party which was not accounted for by this party.

The assessee filed copy of the bank statement for reconciliation. It

was contended that payments made in past of Rs.5,82,489/- has not

been recognized. In this way assessee has reconciled the difference

of Rs.17,46,652/-. In similar way assessee has reconciled the

difference in other accounts. The ld. first appellant authority has ITA No.1210/Ahd/2011 4 Asst. Year 2007-08

observed that the AO did not grant proper opportunity to the

assessee. He called for the details at the fag-end of December, 2009.

The confirmation was received by him on 28th December, 2009.

Without confronting the assessee he has used these details.

Therefore, the ld. first appellate authority has gone through the details

including bank statement etc. and thereafter satisfied that there is no

difference as such in the sundry creditors details. After going through

the well reasoned finding of the first appellate authority, we do not

see any reason to interfere in it. This appeal of the Revenue is devoid

of any merit, hence dismissed. Order pronounced in the open court.

Order pronounced in the open Court on 29/5/2015

Sd/- Sd/-

(G. D. Agarwal) (Rajpal Yadav) Vice President Judicial Member

Dated 29/5/15

Mahata/- ITA No.1210/Ahd/2011 5 Asst. Year 2007-08

Copy of the order forwarded to: 1. The Appellant 2. The Respondent 3. The CIT concerned 4. The CIT(A) concerned 5. The DR, ITAT, Ahmedabad 6. Guard File BY ORDER

Dy. Registrar, ITAT, Ahmedabad

1. Date of dictation: 25/5/2015

2. Date on which the typed draft is placed before the Dictating Member: 25/5/2015 other Member:

3. Date on which approved draft comes to the Sr. P. S./P.S.:

4. Date on which the fair order is placed before the Dictating Member for pronouncement: __________

5. Date on which the fair order comes back to the Sr. P.S./P.S.:

6. Date on which the file goes to the Bench Clerk: 29/5/15

7. Date on which the file goes to the Head Clerk:

8. The date on which the file goes to the Assistant Registrar for signature on the order:

9. Date of Despatch of the Order: